If you operate a composting facility, the tax classifications that apply to your income vary depending on the specific business activity.  

Generally, the activities of a composting facility include accepting yard waste from individuals, businesses, and municipalities, and turning it into compost.  

Tip fees 

Fees charged for accepting yard waste are subject to Service and Other Activities business and occupation (B&O) tax. 

Manufacturing or processing waste into compost 

Processing waste into compost is a manufacturing activity subject to Manufacturing B&O tax. The tax is based on the value of the products manufactured for sale or for the manufacturer’s own use. Use tax is also due on the value of products you manufacture for your own business use.

You may qualify for a sales and use tax exemption on purchases of manufacturing machinery and equipment. See the Purchases section of this guide for more information. 

For additional information about manufacturing, please see our Manufacturing Guide.

Sales of compost 

Wholesaling B&O tax is due on the gross income from sales of compost to buyers that provide a valid reseller permit. 

Retailing B&O tax is due on the gross income from sales of compost to end consumers. You must also collect retail sales tax, unless the buyer provides a retail sales tax exemption certificate.

A Multiple Activities Tax Credit is available for sales of goods manufactured and sold in Washington, so that the sale is only subject to B&O tax once.

Hazardous waste pickup  

Hazardous waste pickup services include the collection and disposal of hazardous materials, elements, or chemicals. The charges are taxable under the Service and Other Activities business and occupation (B&O) tax classification, and you do not collect sales tax.  

Hazardous waste cleanup  

Hazardous waste cleanup services involve the cleanup of a particular site. Hazardous waste sites are places where materials or toxic substances harm or threaten humans, such as heavy metals, chemicals, or petroleum. For information about how hazardous waste cleanup services are taxable, please see our Construction Guide.

Personal property tax is due on most property used in conducting business. Personal property includes all assets and supplies used by the business. It does not include inventory held for sale.

Examples of items subject to personal property tax include machinery, vehicles, equipment, office furniture, and computers.

You do not pay personal property tax on the excise tax return. This tax is administered by your county assessor. Please see our Personal Property Tax Brochure (PDF 3.74MB) for more information.

Generally, you must pay retail sales tax or use tax on goods used for your business. Examples include, but are not limited to: 

• Furniture and fixtures. 
• Office equipment and supplies. 
• Trucks. 
• Containers provided to customers free of charge. 
• Repair parts and labor. 

If you purchase such items and the seller does not collect sales tax, you must report use tax when you file your excise tax return.

Machinery and equipment for compost facilities

Purchases of certain machinery and equipment used by compost facilities to produce compost may be exempt from sales tax and/or use tax. See the Manufacturer’s sales/use tax exemption for machinery and equipment (M&E) section of our Manufacturing Guide for more information.

Recyclable or salvaged materials are economically viable for further use and are not taken to a landfill or other disposal facility as solid waste.   

Examples of common recycled materials include: 

• Plastic bottles. 
• Paper. 
• Cardboard. 
• Aluminum cans. 

Examples of common salvaged materials include: 

• Furniture. 
• Wood. 
• Bricks. 
• Metals. 
• Vintage textiles. 

Businesses that recycle or salvage materials are not subject to the solid waste collection tax. However, other taxes apply to income based on the business activity.

Collecting recyclable or salvageable materials

Materials hauled to your own facility 

Income from collecting recyclable or salvageable materials for recycling at your own facility is subject to Service and Other Activities business and occupation (B&O) tax. 

Materials hauled to another facility 

Income from collecting recyclable or salvageable materials and hauling them to a third-party recycling facility is subject to public utility tax (PUT) under either the Motor Transportation or Urban Transportation classification. In this scenario, the hauler can only be responsible for loading, transporting, and unloading the materials. Please see our Motor and urban transportation page for more information.  

Tip fees 

Tip fees for accepting recyclable waste are subject to Service and Other Activities B&O tax.   

Processing and selling recyclable materials 

Processing (Manufacturing)  

Processing recyclable materials into other usable products is a manufacturing activity that is subject to Manufacturing B&O tax. The tax is based on the value of the products manufactured for sale or for the manufacturer’s own use. Use tax is also due on the value of products you manufacture for your own business use.

You may qualify for a Multiple Activities B&O Tax Credit if you are required to report the same income under both the manufacturing activity and the selling activity.

You may qualify for a sales and use tax exemption on purchases of manufacturing machinery and equipment. See the Purchases section of this guide for more information. 

For additional information about manufacturing, please see our Manufacturing Guide.

Selling

Wholesaling B&O tax is due on the gross income from sales of recycled or salvaged materials to buyers that provide a valid reseller permit. 

Retailing B&O tax is due on the gross income from sales of recycled or salvaged materials or new manufactured products to end users. You must also collect retail sales tax, unless the buyer provides a retail sales tax exemption certificate.

A Multiple Activities Tax Credit is available for sales of goods manufactured and sold in Washington so that the sale is only subject to B&O tax once.

Gross income from sales of tangible goods and related services to end consumers is generally subject to Retailing business and occupation (B&O) tax, and you must collect retail sales tax. Examples include, but are not limited to: 

• Disposal bags. 
• Cleaning of refuse containers. 
• Repairing of refuse containers. 
• Compost. 
• Recycled or salvaged materials. 

Gross income from sales of tangible personal property to businesses that will resell it is subject to Wholesaling B&O tax. The customer must provide their Reseller Permit or other approved exemption certificate. Examples include, but are not limited to: 

• Scrap metal. 
• Plastic recycling. 
• Compost. 
• Recycled or salvaged materials. 

Solid waste collection occurs when materials are collected and taken to a landfill, transfer station, or other facility for disposal.  

Examples of solid waste include: 

• Refuse. 
• Garbage. 
• Trash. 
• Rubbish. 
• Human waste. 

Solid waste does not include: 

• Toxic waste. 
• Hazardous waste. 
• Materials collected for recycling or salvage. 

Taxes due on solid waste collection activities 

The gross income from solid waste collection is subject to Service and Other Activities business and occupation (B&O) tax, and you must collect the solid waste collection tax from your customers. 

Solid waste collection tax does not need to be itemized on the customer’s invoice or bill, though the customer must be notified that it is being collected. 

The following entities are exempt from the solid waste collection tax: 

• The federal government, its agencies, or instrumentalities.  
• Indian tribes and tribal members for services provided in Indian country.   
• Housing authorities.   

Service and Other Activities B&O tax is also due on the gross income from: 

• Bin pack-out services. 
• Late payment charges or fees. 

Retailing B&O tax is due on the gross income from:  

• Charges for waste containers, bins, and dumpsters that are listed separately from charges for waste collection services.  
• Cleaning waste containers, bins, or dumpsters.  

Retail sales tax must also be collected on the charges subject to Retailing B&O tax, unless an exemption applies. 

Tip fees or similar charges for accepting solid waste are subject to Service and Other Activities business and occupation (B&O) tax.  

For services provided directly to the general public: You must collect the solid waste collection tax from individuals and businesses that are not solid waste collection businesses. 

For services provided to solid waste collection businesses: You do not need to collect the solid waste collection tax as long as they provide a “Solid Waste Collector’s Exemption Certificate.” 

Currently, there is no standard solid waste exemption certificate form. A qualifying single or blanket exemption certificate must include the following: 

We hereby certify that we are engaged in the solid waste collection business and are registered with the state department of revenue to collect and report the solid waste collection tax imposed under chapter 82.18 RCW. We certify further that the solid waste collection tax due with respect to the solid waste collection business being performed under this certificate has been or will be collected and paid and that we are exempt from further payment of this tax on charges for any solid waste collection services being procured by us. 

Business name _____________________________________________ 
Business Address____________________________________________ 
Dept of Revenue registration number (UBI) __ __ __-__ __ __-__ __ __ 
U.T.C. Certificate of Public Necessity number _____________________ 
If not regulated by U.T.C., check this box  
Authorized signature___________________________ Date__________ 

Unclaimed property is property held by a business that has not had contact with the owner of the property for an extended period. Property is usually considered unclaimed after three years. At that point, the property is turned over to the Department of Revenue to be reunited with its owner. 

Annual records review 

You must review your records each year to determine if you hold any unclaimed property. If so, you must report the unclaimed property to the department by October 31 of that year.  

For more information about unclaimed property and how to report, please see our Unclaimed property web page.