Income from providing alteration services is subject to the retailing business and occupation (B&O) tax, and you must collect retail sales tax from your customers. The retail sales tax rate you charge is based on the location where your customer receives the goods you alter for them. Usually, that location is your business. You can find the appropriate sales tax rate by using our Tax Rate Lookup Tool.

Purchases for resale

The purchase of tangible personal property for resale or as a component or ingredient of the cleaned article is a wholesale purchase. You may use a reseller permit to purchase these items without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

You may use your reseller permit to purchase items that will be resold without intervening use, such as:

• Thread.
• Buttons.
• Zippers.

Purchases for your own use

You are considered the consumer of items that are used to provide these services. Purchases made for personal use are subject to retail sales tax. If the seller does not collect retail sales tax, then you must report use tax directly to the department.

Examples of purchases by an alterations service that are subject to retail sales tax or use tax generally include:

• Equipment such as sewing machines, irons, fixtures, and furniture.
• Supplies such as needles, scissors, measuring tapes, and stationery.

Income from dry cleaning and laundry services is subject to Retailing business and occupation (B&O) tax. You must collect and report retail sales tax from your customer on the total charge for the service. The retail sales tax rate is based on where the customer receives their cleaned laundry. You can find the appropriate sales tax rate by using our Tax Rate Lookup Tool.

Purchases for resale

The purchase of tangible personal property for resale or as a component or ingredient of the cleaned article is a wholesale purchase. You may use a reseller permit to purchase these items without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

You may use your reseller permit to purchase items that will be resold without intervening use, such as:

• Dyes.
• Starches.
• Fabric softener.
• Hangers.
• Dry cleaning bags.

Purchases for your own use

A laundry or dry-cleaning service is considered the consumer of items that are used to provide these services. Purchases for use as a consumer are subject to retail sales tax. If the seller does not collect retail sales tax, then you must report use tax directly to the department.

Examples of purchases by a laundry or dry-cleaning service that are subject to retail sales tax or use tax generally include:

• Soaps, cleaning solvents, and other articles or substances that do not become ingredients of the articles cleaned.
• Equipment such as washing machines, dryers, presses, irons, fixtures, and furniture.
• Supplies such as hand tools, scissors, spotting brushes, and stationery.
• Items given to customers without charge.

Income from providing laundry services to nonprofit health care facilities is subject to Service and Other Activities business and occupation (B&O) tax.

Those providing laundry services to the nonprofit health care facilities are considered consumers of all items used in providing such services. As a consumer, you must pay either retail sales or use tax on purchase of items such as detergent, dyes, and fabric softener. If linens and uniforms are provided as part of the laundry service, then you must pay retail sales or use tax on the purchases of these items as well.

Income from linen and uniform supply services is subject to Retailing business and occupation (B&O) tax, and you must collect retail sales tax when the services are provided to consumers.

Linen and uniform supply services provided to other businesses who will resell the services are subject to Wholesaling B&O tax, as long as the business provides a reseller permit or valid exemption certificate. Without valid documentation, the sale is considered a retail sale subject to Retailing B&O tax and retail sales tax.

Purchases for resale

The purchase of tangible personal property for resale or as a component or ingredient of the cleaned article is a wholesale purchase. You may use a reseller permit to purchase these items without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

You may use your reseller permit to purchase items that will be rented or resold without intervening use, such as:

• Linens.
• Uniforms.
• Towels.
• Fabric softener.
• Dyes.
• Starches.

Purchases for your own use

A linen and uniform supply service is considered the consumer of items that are used to provide these services. Purchases for use as a consumer are subject to retail sales tax. If the seller does not collect retail sales tax, then you must report use tax directly to the department.

Examples of purchases by a linen and uniform supply service that are subject to retail sales tax or use tax generally include:

• Soaps, cleaning solvents, and other articles or substances that do not become ingredients of the articles cleaned.
• Equipment such as washing machines, dryers, presses, irons, fixtures, and furniture.
• Supplies such as hand tools, scissors, spotting brushes, and stationery.
• Items given to customers without charge.

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 that would be subject to personal property tax include washers, dryers, and cleaning agents.

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

Pickup and delivery charges, in addition to the cleaning charges, are subject to Retailing business and occupation (B&O) tax, and you must collect retail sales tax from your customer. The retail sales tax rate you charge is based on the location where the articles are delivered.

Those who provide pick-up and delivery services as agents for laundry or dry cleaning services providers are subject to Service and Other Activities B&O tax.

Charges for laundry services provided to nonprofit health care facilities, including pickup and delivery services, are subject to Service and Other Activities B&O tax.

Income received from charges for the use of self-service or coin-operated laundry facilities is subject to Service and Other Activities business and occupation (B&O) tax. Retail sales tax does not apply to these charges.

Sales of products

Income received from sales of tangible personal property, such as soap, bleach, fabric softener, and other supplies to consumers, is subject to Retailing B&O tax. You must collect retail sales tax from your customer. If you sell these items in a vending machine, please see the Vending Machine Sales section for more information.

Sales of tangible personal property such as soap, bleach, fabric softeners and other supplies are also subject to litter tax.

Purchases for resale

The purchase of tangible personal property for resale is a wholesale purchase. You may use a reseller permit to purchase these items without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

You may use your reseller permit to purchase items that will be resold without intervening use, such as:

• Soap.
• Bleach.
• Fabric softener.
• Laundry bags.

Purchases for your own use

A self-service or coin-operated laundry service is considered the consumer of items that are used to provide these services. Purchases for use as a consumer are subject to retail sales tax. If the seller does not collect retail sales tax, the consumer (purchaser) must report use tax directly to the department.

Examples of purchases by a self-service or coin-operated laundry service that are subject to retail sales tax or use tax generally include:

• Equipment such as washing machines, dryers, presses, fixtures, and furniture.
• Supplies such as hand tools, scissors, spotting brushes, and stationery.
• Items given to customers without charge.

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.

Sales of merchandise through a vending machine are subject to Retailing business and occupation (B&O) tax and retail sales tax. Merchandise may include items such as laundry detergent, fabric softener, and dryer sheets.

Vending machine owners are responsible for reporting the gross sales from their vending machines.

If the sales are subject to sales tax, the retail sales tax amount does not need to be stated separately from the selling price. Owners may use the Tax in Gross deduction for the amount of sales tax included in the selling price. The Tax in Gross deduction is calculated by dividing the gross machine proceeds by 1+ the sales tax rate and subtracting that amount from the gross machine proceeds.

Example: Gross machine proceeds of $40.00 with a sales tax rate of 8%.

$40.00 – ($40.00 / 1.08) = $2.96 Tax in Gross deduction

Commissions

Self-service and coin-operated laundry businesses that earn a commission or fee for allowing vending machine owners to place their machines at the business must report that income under the Service and Other Activities B&O tax classification.

Litter Tax

Litter tax applies to vending machine sales of cleaning agents and toiletries. The amount subject to tax will be the taxable amount under Retailing B&O tax, which is gross proceeds less any Tax in Gross deduction.

For more information, please see our web page on Litter tax.

Purchases for resale

You may use a reseller permit to purchase items you sell in your vending machine without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

Air quality/general orders permit: The Department of Ecology requires certain business types, like dry cleaners, to apply for the air quality permit.

Business license: If you plan to operate as a business rather than as an employee, you must apply for a business license with the Department of Revenue.

Independent contractors who provide wash and fold laundry services for a third-party report their income under the Wholesaling business and occupation (B&O) tax classification. The third-party seller must provide you with a reseller permit for the sale to be considered a wholesale sale. If you are not provided with a reseller permit, then the service is considered a retail sale subject to Retailing B&O tax and retail sales tax.