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Utility Tax

The City Utility tax refers to a tax on public service businesses, including businesses that engage in telecommunications, supply of electricity and natural gas, and solid waste collection. Utility tax is a gross receipts tax that is measured on the value of products or services, gross proceeds of sales, or gross income of business.

 

The tax is in lieu of the business and occupation (B&O) tax but is consistent with B&O tax. Utility tax is calculated on the gross income from activities. This means there are no deductions from the Utility taxable income for labor, materials, or other costs of doing business. 

 

How to Report

The Utility tax is reported and paid monthly. Monthly returns are due by the end of the month following the close of the tax period. 

 

Communications/electricity/solid waste collection businesses with gross income of less than $20,000 per month, as indicated by billings and/or charges to or for service to Tacoma customers, may request to report and pay the Utility tax quarterly.

 

If your business gross income is less than $20,000 per month and you would prefer to report on a quarterly basis send an email to taxinfo@cityoftacoma.org with your City Account Number and request to change your filing frequency.  Change in filing frequency can only be done at the start of a quarter (January, April, July, October).  

 

Tax Classifications & Rates

All business activity is reported under a certain tax classification and each classification has its own tax rate.  

 

Deductions and Exemptions

There may be deductions or exemptions available for the following types of businesses that engage in public service businesses. The information can be found in the Tacoma Municipal Code Subtitle 6A. Please follow the link below for more information.

 

Communications TMC 6A.40.090

Electricity and Solid Waste Collection TMC 6A.50.060

Natural or Manufactured Gas TMC 6A.90.050

 

Telephone/Cellular Phone Charges

The utility tax is levied on the utility company, however, many companies will include the City tax on their customers bill.  An explanation of some local charges that may be on your phone bill can be found here.