Lynnwood tax rates start with a combined sales and use tax of 10.7 percent as of April 1, 2026, a city property tax levy of $0.77 per $1,000 of assessed value, and a state real estate excise tax that runs from 1.10 to 3.00 percent on a graduated scale.1City of Lynnwood. Treasury Washington imposes no personal income tax, so sales and property taxes do most of the work here.
Sales and Use Tax: 10.7 Percent
Every taxable retail purchase in Lynnwood carries the 10.7 percent combined rate.1City of Lynnwood. Treasury That rate stacks several layers:
- Washington state sales tax: 6.5 percent2Washington Department of Revenue. Sales and Use Tax Rates
- Sound Transit regional tax: 1.4 percent, approved by voters in 2016 for light rail and regional transit3Sound Transit. Regional Tax Information
- Lynnwood Transportation Benefit District: 0.9 percent, also voter-approved in 2016, for local road and transportation projects1City of Lynnwood. Treasury
- The remainder funds Community Transit bus service and other county-level services
What You Pay Tax On
The tax applies to most tangible goods and many services performed in the city. Groceries and prescription medications are exempt from Washington sales tax, so those purchases do not carry the 10.7 percent rate. Prepared food, soft drinks, and alcohol are fully taxable. Businesses collect the tax at the point of sale and remit it to the Washington Department of Revenue.4Washington Department of Revenue. Retail Sales Tax
Businesses that miss a filing deadline face a 9 percent penalty on the tax due, climbing to 19 percent after the end of the following month and 29 percent after two months, plus interest on the unpaid balance.5Washington Department of Revenue. Penalty Waivers
Property Tax
The City of Lynnwood’s own property tax levy rate for 2026 is $0.77 per $1,000 of assessed value.1City of Lynnwood. Treasury That’s only the city’s slice. Your total bill also includes levies from the local school district, fire district, regional library system, port district, and other taxing entities, all calculated by the Snohomish County Assessor based on your property’s market value. By the city’s breakdown, roughly 10 cents of every property tax dollar you pay goes to Lynnwood city services like police, roads, and parks.
Due Dates and Late Interest
Property taxes are due in two installments: April 30 and October 31.6Snohomish County, WA. General Tax Information The Snohomish County Treasurer handles billing and collection. Missing either deadline triggers interest that compounds monthly. For residential property with four or fewer units, the annual interest rate on delinquent taxes is 9 percent. Larger residential and commercial properties face 12 percent annually.7Washington Department of Revenue. Legislative Changes to Delinquent Property Taxes Those rates apply to the full delinquent balance.
Appealing Your Assessment
If you believe the assessed value on your property is too high, you can appeal through the Snohomish County Board of Equalization using comparable sales data from your neighborhood. If the county board rules against you, you have 30 days from the mailing date of that decision to file a second appeal with the Washington State Board of Tax Appeals, and that deadline cannot be extended for any reason.8Washington State Board of Tax Appeals. Property Tax Appeal
Exemptions for Seniors and People with Disabilities
Washington offers property tax exemptions and deferrals for senior citizens and people with disabilities. You generally must be at least 61 years old or retired due to a disability, own and occupy the home as your primary residence, and fall below the state’s household income threshold. The Department of Revenue publishes updated income limits each tax year. A qualifying exemption can freeze or reduce your assessed value. Applications go through the Snohomish County Assessor’s office.
Real Estate Excise Tax When You Sell
When you sell property in Lynnwood, Washington’s real estate excise tax applies to the sale price. The state portion uses a graduated rate structure:9Washington Department of Revenue. Real Estate Excise Tax
- $525,000 or less: 1.10%
- $525,000.01 to $1,525,000: 1.28%
- $1,525,000.01 to $3,025,000: 2.75%
- Above $3,025,000: 3.00%
Each tier applies only to the portion of the sale price within that bracket, the way income tax brackets work. The city also imposes a local REET on top of the state rate. The seller typically pays, though buyer and seller can negotiate.
Business License Fees
Lynnwood does not impose a local Business and Occupation tax.10City of Lynnwood. Business Licensing Washington’s statewide B&O tax still applies through the Department of Revenue, but there is no additional city layer.
You need a Lynnwood business license once your annual gross income within city limits exceeds $2,000. The fee is based on headcount, not revenue:
- New license: $166 base fee, plus $124 per full-time employee (15 or more hours per week) and $64 per part-time employee (14 or fewer hours per week)
- Annual renewal: $133 base fee, plus the same per-employee charges
- Short-term license for temporary work: $53 for 60 days, plus a 2.5 percent technology fee11Washington Department of Revenue. Lynnwood City Endorsement
Businesses located outside Lynnwood but earning income within city limits need a license once their gross annual income in the city exceeds $5,000, under the same fee structure. Starting March 1, 2026, the city is implementing a fee increase to better reflect the cost of processing license applications.10City of Lynnwood. Business Licensing
Utility and Lodging Taxes
Lynnwood taxes utility providers on gross revenue, and those costs typically appear as a line item on your monthly bill. Telephone, cellular, and solid waste collection services are each taxed at 6 percent of gross income. Cable television carries a 1 percent rate.12City of Lynnwood. Ordinance 2746 Electric, natural gas, water, and sewer utilities carry city utility taxes under separate ordinances.
Hotels and motels collect a lodging tax on short-term stays as a percentage of the nightly room rate, added at checkout. The Washington Department of Revenue publishes updated lodging rates by location quarterly.
The Federal Deduction Angle
Because Washington has no personal income tax, Lynnwood residents who itemize on their federal return can elect to deduct state and local sales taxes instead of income taxes on Schedule A.13Internal Revenue Service. Use the Sales Tax Deduction Calculator You can total your actual receipts or use the IRS optional sales tax tables, which estimate your deduction from income, family size, and local tax rates. A large purchase like a car or boat lets you add that sales tax on top of the table amount.
The combined deduction for all state and local taxes, including property taxes and either sales or income taxes, is subject to a federal cap. Under the One Big Beautiful Bill Act signed in July 2025, the cap for 2026 is $40,400 for most filing statuses and $20,200 for married filing separately. With Lynnwood’s property taxes and a 10.7 percent sales tax rate, higher-income homeowners can bump into that ceiling, and any excess provides no federal tax benefit.