What types of taxes must a business pay?

In Washington, businesses must pay a variety of taxes depending on their structure and type of business. The most common types of taxes are federal and state income taxes, unemployment taxes, and sales tax. At the federal level, businesses must pay income taxes on their profits. This is done with Form 1120, which is the federal corporate income tax form. Businesses must also pay federal unemployment tax, which is usually paid quarterly. At the state level, businesses must pay income taxes and unemployment taxes. Washington State requires businesses to file a state business and occupation (B&O) tax form if they have a gross income of more than $12,000 or have an employee. This B&O tax is based on the amount of income the business earns. Businesses also need to pay sales tax, which is a tax imposed on the sale of goods or services. The amount of sales tax depends on the local and state governments, and it’s typically collected from the customer who makes the purchase. Finally, businesses that sell items online may need to pay taxes in other states if they have customers outside of Washington. This is known as a “use tax” and must be paid to the state where the customer resides. Overall, taxes are an important part of any business and understanding the types of taxes that must be paid is an important part of setting up a business.

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