Business & Occupation Tax Regulations
Definition of Terms
- “Engaging in business” - Any person commencing, conducting or continuing in business.
- “Gross income of the business” - The value proceeding or accruing by reason of the transaction of the business engaged in. This includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks and bonds, or other evidence of:
- Cost of materials used
- Delivery costs
- Discount paid
- Dividends, all without any deduction on account of the tangible property sold
- Labor costs
- Taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses
The City of Longview levies a Business and Occupation tax on the following categories:
LMC 5.05.040 The City defines an extractor as any person who from the person's own land or from the land of another under a right or license granted by lease or contract, that engages in the business of mining, quarrying, taking or producing of coal, oil, natural gas, ore, stone, sand, gravel, clay, minerals, or other natural resource product; or the falling, cutting, or taking of timber, Christmas trees, other than plantation Christmas trees, or other natural products or taking fish, or taking, cultivating, or raising shellfish, or other sea or inland water foods or products. The tax imposed on this category is the gross income of the business multiplied by the rate of one-tenth of one 1. Simply stated the tax on extracting is $1 per $1,000 on the gross business activity.
- Printing and Publishing
LMC 5.05.040 The City defines printing and publishing as any person or firm that engages in the business of printing and publishing books, periodicals, magazines or newspapers. The tax imposed on this category is the gross income of the business multiplied by the rate of one-tenth of one 1. As with contracting the tax on printing and publishing is $1 per $1,000 on the gross business activity.
- Retailing and Retailing Services
- LMC 5.05.040 The City defines retail sales as any person or firm that engages in the business of making sales at retail. The tax imposed on this category is the gross income of the business multiplied by the rate of one-tenth of one. As with extracting and printing and publishing the tax on retail sales is $1 per $1,000. Contractors who engage in the business of residential, commercial or industrial construction are classified under the Retail Sale category.
LMC 5.05.040 The City defines retail services including lawn mowing, maintenance and repair services, photographers, interior decorating services, and dry cleaning. Retail services shall also include the sale of or charge made for personal, business, or professional services such as amusement and recreation services; abstract, title insurance, and escrow services; credit bureau services; automobile parking and storage garage services; landscape maintenance and horticultural services; service charges associated with tickets to professional sporting events; personal services such as physical fitness services, tanning salon services, tattoo parlor services, body piercing services, and dating services; and it shall also include the renting or leasing of a tangible personal property to consumers and the rental of equipment with an operator. The tax rate for retail services is 1/10 of 1% or 1 times the gross revenue.
- Service and Other Activities
LMC 5.05.040 The City defines services as any person or firm that engages in the business of rendering any type of service. The tax imposed on services is the gross income of the business multiplied by the rate of one-fifth of one 2. Service activities are taxed $2 per $1,000 of gross business activity.
LMC 5.06.120 The City also levies a Business and Occupation tax on public utilities. The various utilities and their rates follow:
- Electrical Energy - 6%
- Garbage or Refuse Collection - 9.5%
- Natural Gas - 6%
- Sewer - 9.5%
- Telephone (includes Cellular Services) - 6%
- Television Cable - 6%
- Water - 9.5%
LMC 5.05.040 The City defines wholesale sales as any person or firm that engages in the business of making sales at wholesale. The tax imposed on this category is the gross income of the business multiplied by the rate of one-tenth of one 1. Wholesale sales are taxed $1 per $1,000 of gross business activity.
Gross Operating Revenue
In all of the above instances, the B and O tax is calculated by multiplying the gross operating revenue by the applicable tax rate. The gross operating revenue is the value proceeding from the performance of the system involved without any deduction on account of the cost of the commodity furnished or sold, the cost of material used, labor costs, interest, discounts, delivery costs, taxes, or any other expense paid and without any deduction on account of losses.
- LMC 5.05.120 Deductions - Some questions you may have are special and unique requiring legal counsel for an opinion. Please see LMC 5.05.120 for more information.
- LMC 5.05.080 Multiple Activities Credit (MAC) When Activities Take Place in One or More Cities - The credit is available for persons or firms who engage in multiple taxable activities in one or more cities with an eligible gross receipts tax. If the person or firm both manufactures and sells the product, then both activities are taxable under the applicable tax classifications. The MAC form is required to be filed, and accompany the corresponding tax return for each period a credit is claimed. The amount of the credit shall not exceed the tax liability arising with respect to the sale of those products.
- LMC 5.05.090 Deductions to Prevent Multiple Taxation of Transactions Involving More Than One City - Deductions are included in the gross amount and are then deducted from the gross to arrive at the taxable amount. Costs of doing business are not deductible. Please see LMC 5.05.090 to review all applicable deductions.
- LMC 5.03.210 Delinquent Payment - Penalties and Interest - Penalties are charged as follows:
- $5 or 5% of the tax due (whichever is greater) if not received on or before the due date.
- $5 or 15% of the tax due (whichever is greater) if received after the last day of the first month following the due date.
- $5 or 25% of the tax due (whichever is greater) if received after the last day of the second month following the due date.
- For further information on penalties, please see LMC 5.03.210.
Interest Will Be Charged
- If the tax and/or penalty paid is less than the amount due, interest is added from the date of underpayment until paid. You have 30 days from the notice of such underpayment to pay the balance due plus interest.
- If payment of any assessed amount is not received within 30 days, an additional penalty of 10% of the amount of the assessment will be added (with a minimum penalty amount of $10).