Use tax

Use tax

Use tax is a tax imposed on the use of tangible personal property in Washington when sales tax has not been paid. It is computed at the same rate as the sales tax. Unless specifically exempt by law, all tangible personal property purchased or used in this state is subject to either the sales tax or use tax, but not both, regardless of where or from whom the property is purchased.

There are many instances where sales tax is not paid to the seller. The following are examples of transactions where use tax would be due if sales tax wasn’t paid on the acquisition of these items:

  • Catalog purchases
  • Internet purchases
  • Inventory withdrawals

To report use tax, total your taxable purchases and list the amount on the use tax lines (state and local) of the excise tax return.

Note: Sales tax applies to the selling price whereas use tax applies to the value. The local use tax rate is determined by the location where the goods are used.

References: RCW 82.08.020 and RCW 82.12.020; WAC 458-20-178