Commissions – brokers (agents)

Real estate brokers (commonly referred to as agents), managing brokers, and designated brokers perform real estate brokerage services for real estate firms and are required to be licensed in this state.

Real estate firms are required to pay business and occupation (B&O) tax on the gross commission earned by the firm, including the commission paid to brokers, managing brokers, and designated brokers. Generally, this means you do not have to report B&O tax unless the firm has not reported your commission income.

For reporting periods starting on or after January 1, 2025, commissions earned from the sale of real estate are subject to B&O tax under the Real Estate Commissions classification at a 1.5% rate. There is no change to the tax rate. Retail sales tax does not apply.

Prior to 2025, real estate commissions were reported under the Service and Other Activities classification at a1.5% rate.

Registration and reporting requirements

You may need to register and get a business license even if the real estate firm is paying B&O tax on your commission income.

However, you may not need to file excise tax returns. If you meet certain criteria, you may request your excise tax account be placed on an active non-reporting (ANR) status by sending us a secure message or calling us at 360-705-6705.

References

RCW 82.04.255 Tax on real estate brokers.