In addition to understanding when to collect Washington's retail sales tax, hotel operators must also understand when they owe sales tax or use tax on their consumer purchases of hotel furnishings and complimentary items provided to guests, etc.. On purchases of goods from sellers registered in Washington, sales tax is based on the combined state and local rate for the location where the goods are received. On purchases of goods from sellers that are not registered in Washington, use tax is based on the combined state and local rate for the location where the goods are first used.
Sales Tax
You should pay sales tax when you purchase consumable goods and services. However, if you purchase goods
from a private party that is not in business or you purchase goods from out-of-state vendors, by subscription,
mail order, Internet, etc., you may not be charged sales tax. However, you owe use tax on such goods if you
use them in Washington.
Purchases of goods (and some limited services) for resale (without intervening use) are not subject to
sales tax if a properly completed resale certificate is provided to the vendor.
Use Tax
Washington's use tax is due when goods are acquired for use (i.e., not for resale)
in Washington without payment of the state's sales tax.
Use tax rates are the same as sales tax rates. Thus, the rates vary depending on your location. For local use tax purposes, the location of first use of the property in Washington determines
which rate applies. A business reporting use tax will generally use its location to determine which rate
applies.
Taxable Purchases
Hotel businesses
must pay retail sales tax or use tax on purchases of retail services and items used and/or
consumed by the business. The following list represents some common items purchased for use by hotels.
- Chairs, tables, supplies, furnishings and dishes
- Linens
- Pest control
- Repair parts and labor
- Beds
- Televisions
- Security systems
- Complimentary items: soaps, shampoos, sewing kits, and other items provided
free of charge to lodging customers
- Telephone and cable infrastructure and equipment.
References
Washington Administrative Code 458-20-166 and 458-20-178