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Q:  I'm a building contractor. Do I need to pay sales tax on the equipment I rent to use on a job? I'm already charging my customer sales tax?

A:  Yes, you must pay the sales tax on equipment you rent, even though you charge your customer sales tax on the contract. Why? Because you are using the equipment to perform the job you were hired to do, much like the purchase and use of a hammer or other tools. You are not re-renting or re-selling the equipment to your customer, it does not become a part of the finished product, nor will you leave the equipment with your customer when you have completed the job. You are the consumer of the rented equipment. As the consumer, you owe the sales tax.

The sales tax you pay should be included in the contract price charged to your customer as a cost of doing business, just like the cost of the rental.
More information
WAC 458-20-170
WAC 458-20-211
Construction Tax Guide
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