Multiple Activities Tax Credit

The multiple activities tax credit (MATC) ensures that a business is not taxed twice when it performs multiple taxable activities (manufacturing and selling, for example) that result in the same product. 

Who qualifies for it?

Take this credit if you perform two or more taxable business activities on the same product.

For example, if you both manufacture and sell a product, report sale revenue under two tax classifications: Manufacturing and Retail Sales. Then take the credit so you only pay tax on the product once.

Both business activities can occur in Tumwater. Or one can occur in Tumwater and the other in another Washington city that imposes a B&O tax (also called a gross receipts tax).

Guidelines to Follow

Skip the MATC if you are reporting revenue in only one classification.

Please note that the MATC applies to local B&O taxes only, so paying the Washington State B&O tax does not qualify you for taking the credit for a local B&O tax.

How the Credit Works

Example:

Company A makes furniture in Tumwater's industrial park . It also has a retail store in town where it sells the tables, dressers and desks that it manufactures.

During one quarter, it sells $40,000 of furniture. So on  its Tumwater business license tax return, Company A enters a gross amount of $40,000 for the Retail Sales classification. And because it also made the furniture, it enters $40,000 for the Manufacturing classification.

At this point Company A owes $86 for Retail Sales and $86 for Manufacturing, or $172 total.

Company A then enters multiple activities tax credit (MATC) under "Details of Tax Deductions" on the B&O tax form, and it receives a credit for $86. This insures that it is only taxed once. And its tax due is now $86, not $172.

Retail Service

Sale or charge made for personal, business, or professional services including amounts designated as interest, rents, fees, admissions, and other
services by persons engaged:

• Amusement and recreation services including but not limited to golf, pool, billiards, skating, bowling, swimming, bungee jumping,
• basketball, racquetball, handball, squash, tennis, batting cages, day trips for sightseeing.
• Abstract, title insurance, and escrow services.
• Credit bureau services.
• Automobile parking and storage garage services.
• Landscape maintenance and horticultural services.
• These specific personal services: Physical fitness services, tanning salons, tattoo parlor services, steam bath services, Turkish bath services, escort services, and dating services.
• Rental or lease of tangible personal property to consumers and the rental of equipment with an operator.

Service & Other Activity

Persons engaging within the city in any business activity other than or in addition to those enumerated in the above descriptions. This would include, but not be limited to businesses or professionals that provide medical, legal, engineering, architectural, janitorial, instructional, consulting and accounting services.