The Auburn B&O tax is a local business and occupation tax on gross receipts earned within city limits, applied at rates from 0.05% to 0.18% depending on what your business does. Businesses with companywide gross receipts of $500,000 or less per year are exempt from paying, though some still have to file a return.1City of Auburn. City of Auburn Business and Occupation Tax Guide The tax is calculated on revenue before any deduction for labor, materials, or overhead, so a business operating at a loss can still owe it. Auburn’s tax is separate from the Washington State B&O tax, and paying the state does not satisfy the city.
Who Has to Pay
You trigger the Auburn B&O tax by having a physical presence in the city, such as an office, warehouse, or job site, or by sending employees to perform services inside city limits. The tax is governed by Chapter 3.53 of the Auburn City Code. A city business license is also required for any entity conducting business in Auburn, whether or not it is physically located there.2City of Auburn. Business Licenses
Whether you actually owe tax depends on the $500,000 companywide gross receipts threshold. Businesses the city places on active filing status must submit a return each period even when they fall below the threshold. Those that clearly do not meet the filing criteria are assigned non-filing status and do not file. If you report quarterly using estimated annual figures and your year-end total comes in under $500,000, you can submit an amended return with documentation to claim the exemption.3City of Auburn. City of Auburn Multi-Purpose Tax Return Line Instructions
Rates by Classification
Auburn applies different rates based on the kind of activity generating the revenue. If your business has more than one kind of income, you separate it by classification and apply the correct rate to each line on your return. The current rates are:4City of Auburn. Tax Rates, Due Dates, Important B and O Tax Info
- Retailing: 0.05% of gross proceeds of sales
- Wholesaling: 0.18% of gross proceeds of sales
- Retail services: 0.15% of gross proceeds of sales
- Services and other activities: 0.10% of gross income
- Manufacturing, extracting, printing, and publishing: 0.10% of the value of products
The wholesaling rate is more than three times the retailing rate. If you sell to other businesses rather than end consumers, classifying that revenue correctly makes a meaningful difference.5City of Auburn. B and O Tax Classifications
The Square Footage Tax
Auburn also imposes a square footage tax at $0.10 per square foot per quarter, or $0.40 per square foot per year. You owe whichever is higher: the gross receipts tax or the square footage tax. A business with modest revenue but a large commercial footprint can end up paying the square footage amount instead of the receipts amount.4City of Auburn. Tax Rates, Due Dates, Important B and O Tax Info
Exemptions and Deductions
The full lists appear in ACC 3.53.100 (exemptions) and ACC 3.53.110 (deductions). The ones that come up most often are:1City of Auburn. City of Auburn Business and Occupation Tax Guide
- Sales of real property, though commissions on those sales and fees for licensing the use of real estate are not exempt
- Rental income from real estate leases of 30 continuous days or longer
- Farm products raised, produced, or manufactured in Washington by the farmer selling them
- Manufacturing, selling, or distributing motor vehicle fuel
- Liquor, beer, and wine sales
- Insurance agents (brokers remain subject to the tax)
- Casual and isolated sales outside the normal course of business, such as an accountant selling office furniture
Deductions reduce the gross receipts figure you report. You can deduct revenue from retail or wholesale sales delivered outside Auburn, cash discounts taken by customers, and credit losses or bad debts. Keep documentation for anything you deduct; the city can ask for verification.
How and When to File
Auburn accepts electronic filing through the FileLocal portal, which handles registration, returns, and payments for multiple Washington cities in one account.6FileLocal. FileLocal – A Portal to e-File and Pay Business Taxes, Licenses, and Fees You link it to your Auburn business license account number.7City of Auburn. City of Auburn – File Local Electronic Filing Paper returns go to the city’s finance department by mail. Payment can be made by ACH transfer, credit card, or check.
Returns are due the last day of the month after the reporting period closes. Quarterly filers follow this schedule:
- Q1 (January–March): due April 30
- Q2 (April–June): due July 31
- Q3 (July–September): due October 31
- Q4 (October–December): due January 31
Annual filers submit one return due April 30 of the following year.
Late Penalties
Penalties escalate quickly, so a late return is worth resolving before the next month closes:1City of Auburn. City of Auburn Business and Occupation Tax Guide
- 1 day to 1 month late: 9% penalty ($5 minimum)
- Over 1 month to 2 months late: 19% penalty ($5 minimum)
- Over 2 months late: 29% penalty ($5 minimum)
Interest also accrues on unpaid balances at an annual rate set by the city, which can change year to year.
Records You Have to Keep
Businesses subject to the Auburn B&O tax must keep financial records for 10 years after filing a return. That includes federal and state income tax returns, invoices, vendor lists, inventories, and anything else needed to verify your city tax liability.8City of Auburn. Auburn City Code 3.62.060 – Records to Be Preserved – Examination – Estoppel to Question Assessment
The consequence of missing records is harsh. If the city examines your books within the 10-year window and you cannot produce what they ask for, you lose the right to challenge the city’s tax assessment for the period in question. Their number stands, and you cannot dispute it in court.