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WAC 244 Food and food ingredients.
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
WAC: 458-20-244   12/12/11 WAC 458-20-244 (Rule 244)  Food and food ingredients provides guidelines for determining if food or food ingredients qualify for retail sales tax and use tax exemptions provided by RCW 82.08.0293 and 82.12.0293.

The Department amended Rule 244 to recognize Initiative 1107, passed by the voters in November 2010 and codified as chapter 2, Laws of 2011.  Initiative 1107, in part, repealed the retail sales tax imposed on sales of bottled water and candy by chapter 23, Laws of 2010, 1st Special Session.  Additionally, the subsection explaining the Supplemental Nutrition Assistance Program was updated to remove references to the Food Stamp Act of 1977, stamps, and coupons.  The term “benefits” is now used in lieu of “stamps” or “coupons.”
  458-20-244   10/07/10 Food and food ingredients The Department is amending WAC 458-20-244 to recognize the following legislation:     

2ESSB 6143 (chapter 23, Laws 2010), which extended sales tax to sales of candy and bottled water;
E2SHB 1597 (chapter 106, Laws of 2010), which clarified that retail sales tax applies to the gross vending machine proceeds from sales of soft drinks; and
SB 5470 (chapter 483, Laws of 2009), which provides a sales tax exemption for sales of meals provided at qualified low-income senior housing facilities.
Minor editing changes were also made.

  458-20-244  07/19/1988 Food products.Revised effective 1/1/04.
    05/14/2007 Food and food ingredients. Effective 06/14/07
    11/30/2007 Food and food ingredients.
RCW: 82.08.0293  1988 Exemptions - Sales of food products for human consumption.
  82.12.0293  2003 Exemptions -- Use of food and food ingredients.
     
     
ETA: 3112.2011   04/29/2011 Processing Perishable Meat Products.
The Department issued Excise Tax Advisory (ETA) 3122.2011 Processing Perishable Meat Products. This ETA was originally issued as ETA 2035 in March 2007 to explain who is entitled to the preferential business and occupation (“B&O”) tax rate based on the Washington State Supreme Court decision, Agrilink Foods, Inc. v. Washington State Department of Revenue, 153 Wn.2d 392 (2005).

The following header has been added to this ETA to explain that it does not apply during the period of June 1, 2010 through December 1, 2010.

This ETA applies to periods prior to June 1, 2010 and after December 1, 2010. For the period of June 1, 2010 through December 1, 2010, 2ESSB 6143, Part V, limited the preferential B&O tax rate for processors of perishable meat to specific activities and products. Refer to 2ESSB 6143, Part V, for additional information about these limitations.
  3082.2009   2/2/09 Donations to meal providers
  512.08.244   5/3/78 FOOD PRODUCTS SOLD THROUGH CONVENIENCE FOOD SALES LOCATIONS Cancelled effective 6/30/04. Information is out-of-date and is covered in rule.
  514.08.244   9/18/78 DIETARY SUPPLEMENTS Cancelled effective 6/30/04. Information is out-of-date and is covered in rule.
  516.08.114. 244   3/13/81 DONATIONS TO MEAL PROVIDERS Revised 2/2/09 See ETA 3082.2009
INDUSTRY GUIDES:  06/01/2010 Restaurants & Retailers of Prepared Food
     
     
SPECIAL NOTICES:   
Subject Title Reference:   
Food & Food Ingredients     08/01/2013 Sales of Charcoal Briquettes, Wood Chips, and Similar Items to Restaurants
Food & Food Ingredients     01/01/2013 Personal Chefs
Personal Chefs     01/01/2013 Personal Chefs
Spirits Tax     08/30/2012 Claims of Constitutional Impairment of Contract made under Initiative 1183
Food & Food Ingredients     10/31/2012 Taxability of Soft Drinks
Spirits Tax     03/01/2012 Questions and Answers on Spirits Tax for Retailers
Food & Food Ingredients     07/25/2011 King County Food and Beverage Tax Expires
King County     07/25/2011 King County Food and Beverage Tax Expires
Bottled Water     11/17/2010 Sales Tax Repealed on Bottled Water, Candy and Gum, as of December 2, 2010
Candy     11/17/2010 Sales Tax Repealed on Bottled Water, Candy and Gum, as of December 2, 2010
Candy     11/18/2010 B&O Credit for Candy Manufacturers Repealed
Carbonated Beverages     11/17/2010 Carbonated Beverage Tax Repealed
Food & Food Ingredients     10/26/2010 B&O Tax Preferences for Perishable Meat Products and Fruit or Vegetable Products 
Food & Food Ingredients     11/17/2010 B&O Tax Preferences for Perishable Meat Products and Fruit or Vegetable Products Updated 11/17/10
Food & Food Ingredients     11/18/2010 Processors of Perishable Meat Entitled to Lower B&O Tax Rate Effective December 2, 2010
Incentives     11/18/2010 B&O Credit for Candy Manufacturers Repealed
Bottled Water     05/11/2010 Bottled Water Subject to Sales Tax
Candy     05/11/2010 Candy and Chewing Gum Subject to Sales Tax
Candy     05/26/2010 Employee B&O Credit for Candy Manufacturers
Food & Food Ingredients     06/03/2010 Changes to the B&O Tax Preferences for Perishable Meat Products and Fruit or Vegetable Products
Carbonated Beverages     06/11/2010 Retailers Subject to Temporary Carbonated Beverage Tax
Carbonated Beverages     06/14/2010 Bottlers and Distributors Subject to Temporary Carbonated Beverage Tax
Food & Food Ingredients     07/02/2010 Determining Whether Sales Tax Applies to Sealed Beverages
Groceries   06/05/2008 Qualifying Florists Exempt from Destination Sales Tax Sourcing
Food & Food Ingredients   05/29/2007 "Prepared Food" Tax Changes
Food & Food Ingredients/ Personal Chefs   01/31/2006 Personal Chefs
Food & Food Ingredients   04/16/2004 Sales Tax Changes for Dietary Supplements--Intended to replace discussion in original food notice based on 2003 legislation
Food & Food Ingredients   04/16/2004 Sealed Beverages--Sales Tax Changes--Intended to replace discussion in original food notice based on 2003 legislation
Food & Food Ingredients   04/16/2004 Prepared Food Tax Changes--Intended to replace discussion in original food notice based on 2003 legislation
Food & Food Ingredients   04/07/2004 Sales of Bakery Items--Intended to replace discussion in original food notice based on 2003 legislation
Food & Food Ingredients   11/19/2003 Food and Food Ingredients--Sales Tax Changes--Effective 1/1/04.
     
DIRECTIVE: NONE   
RPM: NONE   
WTD: 2 WTD 173 87-18  RETAIL SALES TAX -- NOVELTY ITEMS -- SALES BY BAKERY. The retail sales tax applies to sales of food containers and other novelty items sold by a bakery, if novelty items and food products are sold as a package, the retail sales tax applies unless the value ofthe non-food items is less than the value of the food or the price of the non-food items is stated separately.
  2 WTD 173 87-18  RETAIL SALES TAX -- USE TAX EXEMPTION -- FOOD PRODUCTS -- BEVERAGES. Coffee, tea, milk and other noncarbonated beverages are included in the definition of "food products" for purposes of the exemption provisions of RCW 82.08.0293 and 82.12.0293; carbonated of the exemption provisions of RCW 82.08.0293 and 82.12.0293; carbonated beverages are not included as exempt food products.
  2 WTD 173 87-18  RETAIL SALES TAX -- USE TAX -- EXEMPTION -- FOOD PRODUCTS. Sales of food products by restaurants, drive-ins, and concession stands in places as amusement parks are subject to the retail sales tax.
  2 WTD 173 87-18  RETAIL SALES TAX -- EXEMPTION -- FOOD PRODUCTS -- SALES AT MALLS -- COMBINATION BUSINESSES -- ETB 528. A business selling both taxable and nontaxable items is required to keep accounting records and sales receipts which segregate the taxable and non-taxable sales.
  2 WTD 173 87-18  RETAIL SALES TAX -- EXEMPTION -- SALES AT MALLS -- BAKERY ITEMS. Sales of bakery items by retail bakery located in shopping mall are exempt of retail sales tax where items are enclosed in metal tins, sealed in large paper bags, or wrapped in small paper bags with instruction for reheating at home. Such sales not found to be sold in a way to invite immediate consumption where seller did not provide tables, chairs, or counters for consumption of food or locate near food courts and provide trays, dishes or tableware to facilitate the immediate consumption of food.
  2 WTD 173 87-18  B&O TAX -- FOOD PRODUCTS. The gross proceeds from sales of food products in Washington are subject to the B&O tax.
  2 WTD 421 87-103  B&O TAX -- RETAIL SALES TAX -- FOOD SERVICES -- EXECUTIVE DINING ROOM. Receipts from management fees and charges for food, labor and related supplies consumed by a food service contractor in providing a food service for a company's executive dining room are subject to retailing B&O and retail sales tax.
  3 WTD 21 87-110  RETAIL SALES TAX -- EXEMPTION -- FOOD BANKS -- NONPROFIT ORGANIZATION -- PURCHASE OF MEALS TO FEED THE POOR AND INFIRM -- ETB 525. Prior to May 1, 1982, sales tax applied to the purchase of prepared meals by a nonprofit organization to feed the poor and infirm. RCW 82.08.0292, effective May 1, 1982 until June 30, 1983, and RCW 82.08.0293, effective July 1, 1983 and thereafter, exempt such purchases from sales tax.See ETB 525 as to how a nonprofit organization qualifies as a "food bank" for the sales tax exemption.
  6 WTD 291 88-314  RETAIL SALES TAX -- EXEMPTION -- SALES OF FOOD. Exemption of "food products" from sales tax does not apply when products are sold adjacent to an area inviting or permitting consumption of the food. Test is whether such area exists, not who provides it.
  7 WTD 317 89-241  RETAIL SALES -- CATERING -- PREPARATION OF MEALS FOR OTHERS -- FOOD HANDLER'S PERMITS. The preparation of food for others is a retail sale and subject to the retailing category of the business and occupation tax and subject to the retail sales tax. Prior to June 1, 1988, the rule stated that caterers were subject to the retail sales tax; after the statutory and rule change, persons required to have a food handler's permit under RCW69.06.010 are making retail sales. RCW 69.06.010 requires every person handling unwrapped or unpackaged food to have a food and beverage worker's permit. The fact that a particular county might not require one does not change the rule.This determination has been overruled or modified in whole or part by Det. No. 04-0132, 24 WTD 254 (2005).
  7 WTD 397 BTA35820  SALES TAX -- RESTAURANT TAKE-OUT FOOD. Food prepared in a restaurant, whether "take-out" or "eat-in," is subject to sales tax. The sales tax exemption for "combination businesses" did not apply to taxpayers' restaurant, where the food was prepared and sold at the taxpayers' restaurant. RCW 82.08.0293; WAC 458-20-244.
  8 WTD 107 89-366  Certain products, although they may be " food products" in a general sense, may still not qualify for the deduction provided in the referenced statute and rule. Minerals suspended in water and sold in that condition in a bottle, are subject to the retail sales tax as provided in Rule 244.
  8 WTD 175 89-447  RETAIL SALES TAX -- HOSPITALS -- MEALS FOR PATIENTS PURCHASED FROM CATERER -- PARENT COMPANY'S CHOICE OF ENTITIES. Where hospital chooses to contract with another corporation to prepare and provide meals for its patients, the caterer is engaging in a retail activity and its sales of meals to the hospital are subject to retail sales tax.
  9 WTD 9 89-389  RETAIL SALES TAX -- FOOD PRODUCTS -- EXEMPTIONS -- BAKERIES -- PIZZA. The retail sales tax exemption for bakery items sold in bakeries does not extend to pizzas sold on a carry-out basis.
  10 WTD 296 89-453  RETAIL SALES TAX -- NURSING HOMES -- MEALS FOR PATIENTS PURCHASED FROM CATERER. Where nursing home chooses to purchase prepared meals for its patients, the caterer is engaging in a retail activity and its sales of meals to the nursing home are subject to retail sales tax.
  10 WTD 302 89-453A  RETAIL SALES/USE TAX -- HOSPITALS -- MEALS FOR PATIENTS PURCHASED FROM CATERER. Where a hospital chooses to purchase prepared meals for its patients, the caterer is engaging in a retail activity and its sales of meals to the hospital are subject to retail sales tax.
  10 WTD 302 89-453A  SALES/USE TAX -- NOT-FOR-PROFIT HOSPITAL -- MEALS FOR ELDERLY OR LOW-INCOME PATIENTS PURCHASED FROM CATERER.The sales/use tax exemption for meals served by not-for-profit hospital to elderly, disabled or low-income persons does not apply to meals purchased by the hospital from a third party when the meals are provided as part of the services rendered to such patients.
  10 WTD 302 89-453A  Det No. 91-280, 11 WTD 463 (1992), and Det. No. 89-453A, 10 WTD 302 (1990) are hereby overruled to the extent they are inconsistent with the decision herein.25 WTD 116 Dec 20, 2006
  11 WTD 463 91-280  SALES AND USE TAXES -- EXEMPTION -- HOSPITALS -- PATIENT MEALS. A hospital contracts with a food management company for the company to procure unprepared food products which are resold as such to the hospital. The company then supervises the hospital's food service staff on site in preparing patient meals from the unprepared food products. The food service company is not selling prepared foods or meals to the hospital. Instead, it is providing food service management. No sales or use tax is owing on patient meals.
  11 WTD 463 91-280  SALES/USE TAX -- NOT FOR PROFIT HOSPITAL -- MEALS FOR ELDERLY OR LOW INCOME PATIENTS. The sales/use tax exemption for meals served by not-for-profit hospital to elderly, disabled or low-income persons does not apply when the meals are provided as part of the services rendered to such patients.
  11 WTD 463 91-280  Det No. 91-280, 11 WTD 463 (1992), and Det. No. 89-453A, 10 WTD 302 (1990) are hereby overruled to the extent they are inconsistent with the decision herein.25 WTD 116 Dec 20, 2006
  13 WTD 170 93-016  RETAIL SALES TAX -- EXEMPTION -- FOOD PRODUCTS -- DRIED AND POWERED HERBS SOLD IN CAPSULIZED FORM. The sales tax exemption does not apply to dried or powdered herbs used for perceived health benefits. The rule extends the exemption to "powdered spices and herbs" as well as to herbal extracts. Dietary supplements are preparations taken in addition to one's normal diet for health purposes and are not pure herbs sold for eating or for use in flavoring food.
  14 WTD 210 94-047  RETAIL SALES TAX -- FOOD PRODUCT EXEMPTION -- BREWING SUPPLIES. The food product exemption applies to the sale of products which are reasonably and commonly expected to be consumed by humans. In applying the exemption we look to the nature of the item being soldnot to where and how the item is sold.
  14 WTD 210 94-047  RETAIL SALES TAX -- FOOD PRODUCT EXEMPTION -- BREWING SUPPLIES. Corn syrup, unhopped malt extracts, whole grains, yeast, and other items which are sold by a home brewing store and which are reasonably and commonly expected to be consumed by humans are subject to the exemption. Processing agents, hops, and home brewing kits which include nonfood items are not entitled to the exemption.
  19 WTD 85 99-113  RETAIL SALES TAX EXEMPTION -- FOOD HERBS AND HERBAL EXTRACTS DIETARY SUPPLEMENTS OR ADJUNCTS.If a bulk herb or herbal extract is commonly and reasonably expected to be used only as a dietary supplement or for medicinal purposes, it is subject to tax.In contrast, bulk herbs or herbal extracts that are commonly and reasonably expected to be used as a cooking ingredient, spice or tea are exempt food products.In determining whether an item is commonly and reasonably to be used for medicinal or dietary supplement purposes, the packaging of the item may be important.
  19 WTD 923 00-013  RETAIL SALES TAX EXEMPTION FOOD PRODUCTS POWDERED DRINK MIXES SOLD PRIMARILY TO ATHLETES AND BODYBUILDERS DIETARY SUPPLEMENTS OR ADJUNCTS.Sales of powdered drink mixes, which contain carbohydrates and/or protein (and may contain vitamins, minerals, and/or fat) are exempt from retail sales tax under RCW 82.08.0293 as food products.These products fall within the common and ordinary meaning of food, as material containing essential body nutrients, such as carbohydrates, fats, or proteins that is taken in and assimilated by an organism to maintain life and growth.The powdered drink mixes are not taken to meet special vitamin or mineral needs, and, as such, are not excluded from the exemption as dietary supplements or by the mixes.
  20 WTD 343 99-341  SALES TAX -- AUDITS TEST PERIODS REASONABLE RESULTS.The use of test periods is an appropriate audit procedure if proper consideration is given to factors which could lead to other than reasonable results.Test period found acceptable where taxpayer purchases were used to project taxable sales and where an adjustment was made for the fact that taxable items sold more slowly than exempt items at a grocery store.
  24 WTD 254 04-0132  RETAIL SALES TAX FOOD PREPARATION.A person who prepared and served food in private homes for consumption by household members and their guests was not required to have a food and beverage service workers permit under RCW 69.09.010, and was therefore not required to collect retail sales tax under the food products exemption in effect prior to January 1, 2004.
  25 WTD 116 05-0131  RETAIL SALES TAX -- EXEMPTION -PURCHASE OF MEALS NONPROFIT HOSPITAL.A nonprofit hospitals purchase of meals from third party vendors, which the hospital provided to its senior citizen, disabled, or low-income patients, qualifies for the RCW 82.08.0293(3)(b) exemption from retail sales tax.
  27 WTD 36 07-0206  RCW 82.08.925:RETAIL SALES TAX -- EXEMPTION - DIETARY SUPPLEMENTS PRESCRIPTION -- ARNP.For periods after January 1, 2004, dietary supplements prescribed for human use and dispensed by an advanced registered nursing practitioner are exempt from retail sales tax under RCW 82.08.925.
  29 WTD 80 09-0280 12/15/10 Rule 244; RCW 82.08.0293: RETAIL SALES TAX EXEMPTION FOR FOOD AND FOOD INGREDIENTS - EXCEPTION FOR PREPARED FOOD - BAKERY ITEMS.  Piroshkies filled with meat, cheese, and/or vegetables sold by a restaurant are not “bakery items” as defined in RCW 82.08.0293(2)(b)(ii)(C) and Rule 244 because they are sold as meals and do not fall within the ordinary plain meaning of “pastries” as sweet baked goods.  Therefore, a restaurant, deli, or bakery that sells meat, cheese, and/or vegetable piroshkies must charge retail sales tax.
  32 WTD 60 11-0346 04/04/2013 RULE 244, RULE 254; RCW 82.32.070:; RETAIL SALES TAX – RETAILING B&O TAX – RECORDKEEPING – FAILURE TO KEEP RECORDS. All sales of food and food ingredients at an establishment will be treated as taxable unless the seller separately accounts for sales of exempt and nonexempt food and food ingredients. Rule 244(6). The Department is authorized to estimate a grocery store owner’s retail sales tax liability where the taxpayer failed to keep or provide reliable and complete records detailing taxable and nontaxable sales.
  32 WTD 276 13-0048 10/29/2013 WAC 458-20-244(4)(c)(iii)(B): GOOD FAITH ESTIMATE OF SALES –
PREPARED FOOD. A restaurant is entitled to make a good faith estimate of its first annual prepared food sales when it acquires a new cash register that is able to track taxable and non-taxable sales.
  32 WTD 276 13-0048 10/29/2013 RCW 82.08.0293(2)(b)(ii)(C): RETAIL SALES TAX – BAKERY ITEMS. A
bakery item is “sold without eating utensils” even if customers independently use saucers served with coffee as plates onto which bakery items are placed.
  33 WTD 51 13-0046 03/31/2014 RULE 244, RCW 82.08.0293: RETAIL SALES TAX – EXEMPTION – FOOD PRODUCTS – VENDING MACHINE ITEMS. A business selling items from vending machines needs to keep accounting records separating “food and food ingredients sold in a heated state and soft drinks” from “all other food or food ingredients.” Those two categories are taxed by separate formulas.
  33 WTD 153 13-0276 05/31/2014 RCW 82.08.925: RETAIL SALES TAX – EXEMPTION – DIETARY SUPPLEMENTS – PRESCRIPTION – CHIROPRACTOR. RCW 82.08.925 provides a retail sales tax exemption for “sales of dietary supplements for human use dispensed or to be dispensed to patients, pursuant to a prescription.” A chiropractor’s sales of dietary supplements to patients do not qualify for the exemption in RCW 82.08.925 because chiropractors are not authorized under Washington law to prescribe or dispense drugs.
     
OTHER: