B&O FAQ

How do I determine if I need a business license with the city of North Bend?

North Bend Municipal Code NBMC 5.04.030 Engaging in Business.

1. The term “engaging in business” means commencing, conducting, or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.

2. This section sets forth examples of activities that constitute engaging in business in the city, and establishes safe harbors for certain activities so that a person who meets the criteria may engage in de minimis business activities in the city without having to pay a business license fee. The activities listed in this section are illustrative only and are not intended to narrow the definition of “engaging in business” in subsection (I)(1) of this section. If an activity is not listed, whether it constitutes engaging in business in the city shall be determined by considering all the facts and circumstances and applicable law.

3. Without being all-inclusive, any one of the following activities conducted within the city by a person, or its employee, agent, representative, independent contractor, broker or another acting on its behalf, constitutes engaging in business and requires a person to register and obtain a business license:

a. Owning, renting, leasing, maintaining, or having the right to use, or using tangible personal property, intangible personal property, or real property permanently or temporarily located in the city.

b. Owning, renting, leasing, using, or maintaining an office, place of business, or other establishment in the city.

c. Soliciting sales.

d. Making repairs or providing maintenance or service to real or tangible personal property, including warranty work and property maintenance.

e. Providing technical assistance or service, including quality control, product inspections, warranty work, or similar services on or in connection with tangible personal property sold by the person or on its behalf.

f. Installing, constructing, or supervising installation or construction of real or tangible personal property.

g. Soliciting, negotiating, or approving franchise, license, or other similar agreements.

h. Collecting current or delinquent accounts.

i. Picking up and transporting tangible personal property, solid waste, construction debris, or excavated materials.

j. Providing disinfecting and pest control services, employment and labor pool services, home nursing care, janitorial services, appraising, landscape architectural services, security system services, surveying, and real estate services including the listing of homes and managing real property.

k. Rendering professional services such as those provided by accountants, architects, attorneys, auctioneers, consultants, engineers, professional athletes, barbers, baseball clubs and other sports organizations, chemists, psychologists, court reporters, dentists, doctors, detectives, laboratory operators, teachers, and veterinarians.

l. Meeting with customers or potential customers, even when no sales or orders are solicited at the meetings.

m. Training or recruiting agents, representatives, independent contractors, brokers or others, domiciled or operating on a job in the city, acting on its behalf, or for customers or potential customers.

n. Investigating, resolving, or otherwise assisting in resolving customer complaints.

o. In-store stocking or manipulating products or goods, sold to and owned by a customer, regardless of where sale and delivery of the goods took place.

p. Delivering goods in vehicles owned, rented, leased, used, or maintained by the person or another acting on its behalf.

How do I find out what kinds of deductions I might be eligible for?

North Bend Municipal Code NBMC 5.04.100 Deductions.

In computing the license fee or tax, there may be deducted from the measure of tax the following items:

A. Receipts from Tangible Personal Property Delivered outside the State. In computing tax, there may be deducted from the measure of tax under retailing or wholesaling amounts derived from the sale of tangible personal property that is delivered by the seller to the buyer or the buyer’s representative at a location outside the state of Washington.

B. Cash Discount Taken by Purchaser. In computing tax, there may be deducted from the measure of tax the cash discount amounts actually taken by the purchaser. This deduction is not allowed in arriving at the taxable amount under the extracting or manufacturing classifications with respect to articles produced or manufactured, the reported values of which, for the purposes of this tax, have been computed according to the “value of product” provisions.

C. Credit Losses of Accrual Basis Taxpayers. In computing tax, there may be deducted from the measure of tax the amount of credit losses actually sustained by taxpayers whose regular books of account are kept upon an accrual basis.

D. Constitutional Prohibitions. In computing tax, there may be deducted from the measure of the tax amounts derived from business which the city is prohibited from taxing under the Constitution of the state of Washington or the Constitution of the United States.

E. Receipts from the Sale of Tangible Personal Property and Retail Services Delivered outside the city but within Washington. Effective January 1, 2008, amounts included in the gross receipts reported on the tax return derived from the sale of tangible personal property delivered to the buyer or the buyer’s representative outside the city but within the state of Washington may be deducted from the measure of tax under the retailing, retail services, or wholesaling classification.

F. Professional Employer Services. In computing the tax, a professional employer organization may deduct from the calculation of gross income the gross income of the business derived from performing professional employer services that is equal to the portion of the fee charged to a client that represents the actual cost of wages and salaries, benefits, workers’ compensation, payroll taxes, withholding, or other assessments paid to or on behalf of a covered employee by the professional employer organization under a professional employer agreement.

G. Interest on Investments or Loans Secured by Mortgages or Deeds of Trust. In computing tax, to the extent permitted by Chapter 82.14A RCW, there may be deducted from the measure of tax by those engaged in banking, loan, security or other financial businesses, amounts derived from interest received on investments or loans primarily secured by first mortgages or trust deeds on non-transient residential properties. (Ord. 1704 § 1 (Exh. A (part)), 2019: Ord. 1477 § 2 (part), 2012).

Do I need to file and pay B&O tax on rental income from the property located in North Bend?

If the gross receipts are derived from long term (30 days or longer) rental income, you are exempt. However, if you have any income that does not fall into that category, like management fees, maintenance & repair services, etc. you would need to submit the city B&O tax return and pay tax on non-exempt revenue, only if your companywide gross receipts exceed the filing threshold of $20,000.00 annual. If you determine that you are exempt, there is no further action needed from you at this time and you will not be required to report, file, or pay B&O tax in North Bend.

Do I need to pay B&O tax on both Gross Receipts tax and Square Footage tax?

If your business meets the $20,000.00 annual gross companywide revenue threshold, you are responsible for reporting, filing or paying Gross Receipts B&O tax in North Bend on the taxable revenue generated within the city limits. If your business occupies more than 10,000 square feet of the building and/or facility and includes all floor space, including mezzanines and lofts, and space used by columns and projections, you will be subject to a Square Footage B&O tax. However, you will not be subject to both the gross receipts tax and the square foot tax, only the greater of the two (North Bend Municipal Code NBMC 5.04.050).

Do I have to report and pay B&O tax on the companywide gross revenue?

No. If your company gross receipts in the city of North Bend limits exceed $20,000.00 you will need to report, file and pay. However, any receipts collected outside of North Bend will be deducted from calculating your tax liability in North Bend.

City of North Bend Tax return - Column 2 companywide revenue – (minus) Column 3 deductions (P.S. to deduct the revenue generated outside of the North Bend city limits, use Sales Delivered Outside of North Bend deduction) = Column 4 taxable amount x Column 5 tax rate = Column 6 tax due).

For example:
Companywide Retailing gross receipts = $70,000.
Gross receipts outside of the city of North Bend = $40,000.
Tax will be calculated on the $30,000 in gross receipts generated in North Bend.
Tax due $30,000 x 0.002 = $60.00

If I don’t owe taxes, do I still need to file?

Yes! All taxpayers must file a return, even if no tax is owed.

How soon will I get my license?

The city of North Bend works to review and issue General Business license applications within 15 days provided all state and local application submittal requirements are in place. Review of the license application takes place by multiple city departments to ensure accuracy, compliance with zoning and other municipal codes, and that all other requirements are met for the business activity to take place at the specific location.

Licenses will be sent to you upon final approval by the Washington State Business Licensing Service (BLS), not the city of North Bend. If you are concerned about the North Bend endorsement or license timeline, please email us.

In most cases, Non-Resident North Bend Business Licenses (those coming into the city from outside of the city limits to engage in business) are approved in less time as the review process is not as extensive. Please email licensing@northbendwa.gov to discuss your application timeline.

How long is the license in effect?

State of Washington BLS renewal or licenses are no longer on a calendar year renewal cycle and will change to your existing anniversary/renewal date with the State of Washington UBI to streamline and simplify the application and renewal process for you. Renewals will be emailed by the state BLS.

Can I assume the former owner’s license?

No, business licenses are nontransferable. A new owner must apply for a new business license.

What happens if I move my business to a new location?

All updates/changes to a business’s information, including contact information, mailing address, new business location address, or change in business activities should be processed through the Washington State Business Licensing Service (BLS).