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Caterers must pay retail sales tax on all items/tangible personal property that they use in the course of providing catering services and that their customers do not consume.

This is true even though some items may be listed separately on the customer’s billing as “rentals.”

Generally, when you purchase an item that will be used exclusively for rental, the transaction is considered a purchase for resale and exempt from retail sales tax. This is also true for items rented or leased exclusively for resale.

However, in the case of caterers, they are not renting out items. Rather, the caterers are considered to be the consumer that uses these items to provide catering service.

Thus, purchases or rentals of items such as tables and chairs, stainless flatware, glasses, ceramic dishes and cups, and cloth tablecloths and napkins by a caterer are not purchases or rentals for resale. The caterer is considered the consumer of such items and must pay retail sales tax at the time they purchase or rent such items for use in a job. This is consistent with the way restaurants are subject to sales tax.

Purchases by a caterer of single-use items that are consumed or kept by the customer or discarded after each job are purchases for resale and are exempt from sales tax. Examples include: paper napkins and other paper products, balloons, flowers, taxable food products, and any other items that can or will be used only once. The caterer must give a reseller permit to the vendor to document the tax exempt nature of the purchase.

WAC 458-20-124