B&O tax and public utility tax exemptions and deductions
B&O tax and public utility tax exemptions and deductionsThere are limited deductions from the B&O tax and public utility tax. There are no deductions for amounts paid to the worker, amounts deducted for payroll taxes, or any other expenses paid or accrued. See Deductions for more information.
Income received for work performed outside the state may be deducted from gross income. Similarly, an interstate haul is exempt from the public utility tax. Bad debts on which tax has been paid and which may be written off for federal tax purposes may be deducted.
Note: Exemptions and deductions that may apply to the customer do not automatically also apply to the staffing business. For example, certain nonprofit hospitals may qualify for a deduction for income received through Medicare. Non-profit and public hospitals are taxable on gross income at a special rate. However, the income received by a staffing business for providing physicians, nurses, or other healthcare workers to the hospital is fully taxable under the Service and Other Activities classification because the staffing business does not meet the criteria for the special nonprofit hospital classification, or for the deduction.
Similarly, income received by licensed Adult Family Homes is exempt from tax. However, the gross income received by a staffing business for providing a health care worker or other worker to the Adult Family Home is fully taxable under the Service and Other Activities classification.