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What is retail sales tax?

What exemptions are available?

Are sales to tribal members subject to retail sales tax?

How can I tell if I'm considered a Washington resident?

What is destination-based sales tax?


What is retail sales tax?

Retail sales tax is Washington’s principal tax source. Businesses making retail sales in Washington collect sales tax from their customer.

Here is some more helpful information

  • Generally, a retail sale is the sale of tangible personal property. It is also the sale of services such as installation, repair, cleaning, altering, improving, construction, and decorating. Other services include improving real or personal property, amusement and recreational activities, lawn maintenance, and physical fitness activities. See Services Subject to Sales Tax for examples of retail services.
  • Retail sales tax includes the state and local components of the tax.
  • Sales tax amounts collected are considered trust funds and must be remitted to the Department of Revenue.
  • The seller is liable to the Department of Revenue for sales tax, whether or not it is collected.
  • Use tax is paid by the consumer when the retail sales tax was not collected by the seller/service provider.
  • Businesses that make a purchase for resale must provide a reseller permit to the seller. If not, the seller must charge the buyer retail sales tax on the total purchase.
  • Businesses also pay the retail sales tax on purchases of items for their own use (such as supplies or equipment) that will not be resold in the regular course of business.

Similarly, when a business purchases a retailing service for its own use, it must pay sales tax on the purchase.

 

What exemptions are available?

Exemptions are included in the gross income amount on the excise tax return and subtracted as a deduction.

Common exemptions include:


For a complete list of exemptions, see our list of retail sales and use tax exemptions.

 

Are sales to tribal members subject to retail sales tax?

Retail sales tax is not imposed on sales to Indians if the tangible personal property is delivered to the member or tribe in Indian Country or if the sale takes place in Indian Country. See our Indian Tax Guide for more information.

 

How can I tell if I'm considered a Washington resident?

Persons are considered residents of this state for sales and use tax purposes if they take actions which indicate that they intend to live in this state on more than a temporary or transient basis.

A person may be considered a resident of this state even though the person is a resident of another state.

The Department of Revenue presumes that a person is a resident of this state if he or she does any of the following:

  • Maintains a residence in Washington for personal use;
  • Lives in a motor home or vessel which is not permanently attached to any property if the person previously lived in this state and does not have a permanent residence in any
    other state;
  • Is registered to vote in this state;
  • Receives benefits under one of Washington's public assistance programs;
  • Has a state professional or business license in this state;
  • Is attending school in this state and paying tuition as a Washington resident or is a custodial parent with a child attending a public school in this state;
  • Uses a Washington address for federal or state taxes;
  • Has a Washington State driver's license; or
  • Claims Washington as a residence for obtaining a hunting or fishing license, eligibility to hold public office or for judicial actions.

Persons may rebut the presumption of residency if they provide other facts which show that they do not intend to reside in this state on either a temporary or permanent basis. A Washington resident who intends to move at a future date, however, will be considered a Washington resident.

 

What is destination-based sales tax?

Effective July 1, 2008, retailers must collect local sales tax based on the destination of the shipment or delivery – “destination-based sales tax.”

Read more about destination-based sales tax