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Various Washington cities have passed ordinances that require retail establishments to charge customers a minimum fee for certain carryout bags.

Is the paper bag fee subject to retail sales tax?

Yes. The charge to customers for paper bags is a retail sale, subject to retail sales tax and the retailing B&O tax. Similarly, the charge for selling reusable shopping bags is subject to retail sales tax and the retailing B&O tax.

Effective July 1, 2014, the cities of Olympia, Tumwater, Lacey and unincorporated Thurston County will join Seattle, Bellingham, and others that have passed ordinances that prohibit the use of plastic carryout bags and require or authorize retail establishments to collect a fee from customers who request paper carryout bags. This fee is kept by the retail establishment.