Terms Relevant to this Guide

Agricultural Product: Any product of plant cultivation or animal husbandry including (for purposes of this guide), but not limited to: A product of horticulture, grain cultivation, vermiculture, viticulture, or aquaculture.

Business and Occupation (B&O) Tax: A gross receipts tax imposed on persons conducting business activities in Washington. There are different reporting classifications for various business activities. Each classification has its own tax rate. Persons performing more than one activity may be subject to B&O tax under more than one classification.

Consumer: A person that uses tangible personal property or receives services that are defined as retail sales. Tangible personal property or services may be for personal use or for conducting business activities. It is important that you know who the consumer is in order to determine if you should collect sales tax.

Farmer: Any person engaged in the business of growing, raising, or producing, upon their own land or upon lands where the person has a present right of possession, any agricultural product to be sold. "Farmer" does not include a person growing, raising, or producing such products for their own consumption.

Fertilizer: Any substance containing one or more recognized plant nutrients that is used for its plant nutrient content and/or that is used to promote plant growth. "Fertilizer" includes limes, gypsum, and manipulated animal and vegetable manures.

Gross Amount: The term “gross amount” means either “gross proceeds of sale” or “gross income of the business.” The gross amount includes all consideration received, including shipping and delivery charges, without deductions for costs of doing business or other expenses.

Manufacture: Includes all activities of a commercial or industrial nature where
labor or skill is applied, by hand or machinery, to materials, resulting in a new, different or useful substance or article of tangible personal property produced for sale or commercial or industrial use. The term “manufacture” does not include the growing, harvesting, or producing of agricultural products

Business License: A form completed by a person registering a business in Washington with one or more state agencies. After submitting a Business License, the person receives a Unified Business Identifier (UBI)/Tax Registration Number and a Business License to post at their business location(s).

Multiple Activities Tax Credit (MATC): Manufacturers that report B&O tax on multiple activities in Washington may qualify for the multiple activities tax credit (MATC). The MATC is a B&O tax credit that is available to certain manufacturers, extractors, and sellers doing business in Washington. Businesses are eligible for this credit against the state B&O tax for gross receipts taxes paid in another jurisdiction or for taxes paid on multiple activities within Washington. The business must complete the Multiple Activities Tax Credit, Schedule C, each time the credit is claimed and attach it to their excise tax return. See WAC 458-20-19301 for additional information on MATC reporting requirements.

RCW (Revised Code of Washington): Laws of the state of Washington.

Certificate: A document provided by the buyer to the seller that documents the wholesale nature of a sale. The law requires a reseller permit.

Retail Sales Tax: A tax imposed on the buyer of goods and certain retail services. The seller is responsible for collecting the tax from the consumer and remitting the tax to the Department of Revenue. The sales tax is a combined state and local tax.

Seed: Propagative portions of plants, commonly used for seeding or planting whether true seeds, bulbs, plants, seed-like fruits, seedlings, or tubers.

Spray Materials: A substance or mixture of substances in liquid, powder, granular, dry flowable, or gaseous form, that is intended to prevent, destroy, control, repel, or mitigate any insect, rodent, nematode, mollusk, fungus, weed, and any other form of plant or animal life normally considered to be a pest. The term includes treated materials, such as grains, which are intended to destroy, control, or repel such pests. "Spray materials" also includes substances that act as plant regulators, defoliants, desiccants, or spray adjuvants.

UBI/Tax Registration Number: Sometimes called a registration, tax reporting account, "C," or resale number, the Unified Business Identifier (UBI) number is a nine-digit number used to identify persons engaging in business activities. The number is assigned when a person completes a Business License (see above) to register with or obtain a license from state agencies. The departments of Revenue, Licensing, Employment Security, Labor and Industries, and the Corporations Division of the Secretary of State are among the state agencies participating in the UBI program.

Use Tax: A tax imposed on the use of goods in this state as a consumer when Washington sales tax was not paid on the purchase of the goods. Either sales or use tax applies, but not both, to goods or services purchased or used by a consumer in Washington. In this manner, use tax serves to complement the sales tax. Like the sales tax, the use tax is a combined state and local tax. Use tax rates and sales tax rates are the same for a particular local taxing jurisdiction.

WAC: Washington Administrative Code. Rules/regulation issued by a state agency to better explain the law.