Food stamp/food coupon eligible products are exempt from retail sales tax when purchased with food stamps/coupons issued by the U.S. Department of Agriculture (USDA). This is true even when food stamps/coupons are used to purchase an item that is normally subject to tax.

The term “food coupons," means any coupon, stamp, type of certificate, authorization card, cash or check issued in lieu of a coupon, or access device, including an electronic benefit transfer card or personal identification number issued pursuant to the provisions of the Food Stamp Act of 1977.

Purchases are frequently paid for with a combination of food coupons and cash. Food coupons should be applied towards the purchases of taxable and nontaxable items so that the food coupons are first applied to pay for the otherwise taxable products.

Example:

• A customer makes a $30 purchase consisting of:
  • $10 worth of exempt food products (e.g., bread),
  • $10 of USDA eligible nonfood items (e.g., soda pop), and
  • $10 of non-eligible nonfood items (e.g., household cleaners).
• The purchaser pays with $8 in food coupons and $22 in check or cash.
• The food coupons would be applied to the soda pop, and the check or cash would be applied to the remaining $2 worth of soda pop, the bread, and the household cleaners.
• Retail sales tax would be computed on $12 (the $10 in household cleaners and the remaining $2 worth of soda pop.)

Additional information on applying food coupons to purchases is provided in Washington Administrative Code (WAC) 458-20-244 (7)(b).