Oak Harbor explains new local B&O tax, says revenue will fund marina improvements

The City of Oak Harbor Finance Department on Jan. 1, 2026, outlined how the city’s new local business and occupation (B&O) gross-receipts tax works and who must comply. The tax, the department said, went into effect Oct. 1, 2025, and the city will use the revenue to fund improvements at the municipal marina.

The guidance explained the tax is assessed on gross receipts — the total revenue or value of products sold within city limits before expenses are deducted — and applies only to activity conducted in Oak Harbor. "Unlike an income tax..., the B&O tax is a gross receipts tax," the presenter said, adding that state B&O and sales-tax collections remain separate.

Why it matters: the city set high filing thresholds to limit burden on small businesses. The finance department said businesses with quarterly gross receipts below $1,000,000 (or $4,000,000 on an annual filing basis) owe $0 in B&O tax, and estimated roughly 1% of local businesses will pay under current economic data. Still,…