Washington – B&O Tax Deduction for Dispute Resolution Centers

SALT Report 1571 – Qualified Dispute Resolution Centers may take a business and occupation (B&O) tax deduction for amounts received as contributions from federal, state, or local governments and non-profit organizations for providing dispute resolution services.
A deduction from B&O tax is also provided to non-profit organizations for amounts received from federal, state, or local governments for distribution to a qualified dispute resolution center.
Who Qualifies?
Dispute Resolution Centers that provide services without charge or for a fee based on ability to pay and non-profit organizations.
Deductions
Qualified Dispute Resolution Centers may deduct amounts received as contributions from federal, state, or local governments, and also amounts received from non-profit organizations for providing dispute resolution services.  However, amounts received from individuals or other organizations are not deductible.
Qualifying non-profit organizations may deduct amounts received from federal, state, or local governments that are distributed to Dispute Resolution Centers.
Claiming the Deduction
Dispute Resolution Centers should report the gross revenue received for providing the dispute resolution services on the excise tax return under the B&O tax classification – services and other activities- then claim an “other” deduction for qualifying amounts with the explanation “Government funding for dispute resolution.”
Non-profit organizations that receive funds to distribute to qualified Dispute Resolution Centers should report the revenue on the excise tax return under the B&O tax classification – service and other activities and then claim an “other” deduction with the explanation “Government funding for dispute resolution.”
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