Shared real estate commissions

From the 2024 DOR Tax Exemption Study

82.04.255 - Shared real estate commissions Description Real estate brokerage offices pay tax only on their share of commissions when two or more brokerage offices participate in a transaction, even if one business is located out of state. Individual associate brokers and salespersons are exempt from B&O tax when the brokerage office pays tax on the gross commission. Purpose To eliminate pyramiding of B&O tax on shared commissions. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $1.880 $2.186 $2.391 $2.653 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $2.004 $2.391 $2.653 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the real estate excise tax growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - The real estate brokerage office passes 50% of the commission to the real estate agent. - The average annual wage of real estat