Credit card processing and merchant services in Tacoma, WA
Tacoma's combined sales tax rate is 10.5% for October through December 2026, and the city taxes business gross income once you pass its thresholds. Both grow with every sale.
Tacoma's combined sales tax rate is 10.5%, a 4.0% local rate plus Washington's 6.5%, under location code 2717 in the Department of Revenue's table for October 1 to December 31, 2026. The department listed 10.4% for the second quarter, so a terminal set up early in the year may be a tenth of a point behind. On a $500 sale, that's 50 cents of tax you'd owe but not collect.
Tacoma also has its own business and occupation tax, a percentage of gross income that depends on your classification. The city lists 0.153% for retailing and 0.4% for services. A shop with $700,000 a year in Tacoma retail sales owes about $1,071, and a consulting firm with $400,000 in Tacoma service income owes $1,600.
Smaller businesses may owe nothing. The city says a business with $250,000 or less in annual gross income is exempt from its B&O tax, and from $250,001 to $300,000 a small business credit cuts the bill to a share of the tax due. Licensing has its own threshold: a business based outside Tacoma that earns less than $4,000 a year in the city (the figure as of January 1, 2026) generally doesn't have to register, unless its work needs a regulatory license or involves the city's admissions or utility taxes.
Tacoma had 229,816 residents in the Census Bureau's July 2025 estimate. Washington's statewide rules, explained on our Washington page, apply here too: deliveries are taxed at the rate where the customer receives them, cash totals can be rounded to the nearest five cents, and surcharges face only the card networks' limits.
B&O tax and card fees both rise with every dollar you sell, so trimming either one adds up. A free statement review shows your card costs line by line, and our virtual terminal handles invoices and payment links for service businesses.
Rules that matter in Tacoma
Tacoma business and occupation tax
Tacoma taxes gross income by classification. The city lists rates of 0.153% for retailing, 0.102% for wholesaling, 0.11% for manufacturing, and 0.4% for service and other activities. Since January 1, 2026, certain services that became subject to state retail sales tax are reported to Tacoma under retailing instead of service and other.
Businesses whose annual gross income is $250,000 or less are exempt from the tax. Those with annual gross income from $250,001 to $300,000 can claim a small business credit and pay only a percentage of the tax due.
Sources: City of Tacoma, City taxes and licensing; City of Tacoma, Business climate, tools and incentives; City of Tacoma, Tax credits
When an outside business needs a Tacoma license
A business located outside Tacoma that earns less than $4,000 a year in gross income in the city (the threshold as of January 1, 2026) doesn't need to register, unless its activity requires a regulatory license, the collection of admissions tax, or the payment of a city utility tax. License fees depend on gross income, which the city measures worldwide: activity inside and outside Tacoma counts, wherever the business is located.
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Common questions
What is the sales tax rate in Tacoma?
10.5% for October 1 through December 31, 2026: a 4.0% local rate plus Washington's 6.5%, under location code 2717. The Department of Revenue listed 10.4% in the second quarter, so check any device you set up before the change. New tables come out every quarter.
Does my small business owe Tacoma B&O tax?
Not if your annual gross income is $250,000 or less; the city says businesses at that level are exempt. From $250,001 to $300,000, a small business credit means you pay only a percentage of the tax due. Above that, the rate depends on your classification, from 0.102% for wholesaling to 0.4% for service and other activities.
How much is Tacoma's B&O tax on retail sales?
The city lists 0.153% for retailing. A store with $500,000 a year in Tacoma retail sales would owe $765, assuming its companywide income is above the credit range. Services are taxed at 0.4%, so a $500,000 service business would owe $2,000.
I'm based outside Tacoma. Do I need a Tacoma business license?
Only if you pass the city's threshold or your work needs a regulatory license. As of January 1, 2026, a business located outside Tacoma that earns less than $4,000 a year in the city doesn't need to register, unless it collects admissions tax or pays a city utility tax.
Disclaimer: general information, not professional advice
This page is general educational information, not legal, tax, accounting or financial advice. Rules and rates vary by place and change, so confirm them with the official source and a qualified professional before you act. Full terms are in our Terms of Service.
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