Sales taxSales tax
Retail sales tax applies to the selling price of taxable transactions and must be separately stated on the customer’s billing.
Reference: RCW 82.08.040
When a retail sale occurs
Sales tax is imposed when tangible personal property is sold and delivered from the seller to the buyer (consumer). Sales tax also applies on the charges for retail services performed for or provided to a consumer (including the improvement or repair of real or personal property), recreational services and certain other services and activities.
Reference: RCW 82.04.050
Who collects sales tax?
The buyer must pay sales tax to the seller, and each seller must collect from the buyer the full amount of the tax. Vessel brokers and dealers are sellers under the law (RCW 82.08.050) and are required to collect and remit sales tax to the Department of Revenue with their excise tax returns.
Is a Washington dealer/broker required to collect sales tax if a boat is delivered to a Washington resident at an out-of-state location?
The dealer/broker is not required to collect Washington sales tax when delivery occurs at an out-of-state location. Sellers must maintain documentation of out-of-state delivery. For more information, see WAC 458-20-193.
Are escrow agents required to collect and remit sales tax?
No. The vessel broker or dealer is considered the seller and is the one responsible for the collection and remittance of the sales tax. Generally, an escrow agent is not required to collect and remit sales tax because they are not defined as a "seller" under RCW 82.08.010.
When a third-party acts as a closer in a vessel sale and collects and remits sales tax on the sale at the time of registration, is the vessel dealer/broker relieved of the tax collection liability?
Brokers are relieved from liability for the collection of the sales tax from buyers when they only receive a commission on the sale and the entire transaction is closed directly between the owner and the buyer. These sales must be reported to the Department of Revenue on the Broker's/Agent’s Transaction Report. After receiving compensation from the transaction, brokers have 10 days to report the sale to the Department of Revenue. This provision applies to both listing brokers and selling brokers.
Sales closed in the presence and/or control of the selling broker who receives compensation from the sale are not exempted from the obligation to collect retail sales tax.
Retail sales tax rates
Brokers/dealers must collect sales tax based on the sales tax rate for the place of sale. If you are unsure about which local code should be used, use our tax rate lookup tool.
Place of sale
With sales of watercraft, the place of sale is the place at which or from which delivery of the watercraft is made to the buyer. Vessel sales are specifically excluded from destination based sales tax.
The location of a third-party closer does not affect the place of sale.
Example: The dealer or broker and vessel are located in Seattle. An Anacortes resident purchases and takes delivery of the vessel in Bellingham. The place of sale and the sales tax rate that applies to the transaction is Seattle.
When a vessel is delivered into Washington from outside the state and an in-state facility, office, outlet, agent or other representative (even though not formally characterized as a "salesperson") of the seller participates in the transaction in some way, such as by taking the order, then the location of the local facility, etc., will determine the place of sale for purposes of the local sales tax.
However, if the seller, the seller's agent or the seller's representative maintains no local in-state facility, office, outlet or residence from which business in some manner is conducted, the tax rate is based on the customer’s location.
Reference: WAC 458-20-145
Freight and delivery charges
Freight and delivery costs charged to the buyer are considered part of the selling price. These charges are subject to retail sales tax and B&O tax.
Sales tax exemptions
There are various sales tax exemptions. See Exemptions to sales/use tax in this guide.