Parts sold to consumers are subject to tax under the Retailing classification of B&O tax and retail sales tax must be collected. This includes parts sold in connection with repairs or parts sold to the consumer without installation.
Parts sold to anyone who will resell the part or use it to repair a vehicle for resale are subject to the B&O tax under the Wholesaling classification. No retail sales tax is collected, however, the seller must receive a reseller permit from the buyer. For sales after January 1, 2010 the resale certificate was replaced by the reseller permit. For further information refer to Reseller Permits.
Parts shipped out of state
Sales of parts shipped out of state by the seller can be deducted under interstate and foreign sales. This deduction is available for both the Retailing and Wholesaling-Other B&O tax along with the retail sales tax. See section under Nonresidents for Vehicles Shipped to Customers Outside of Washington and Delivery to Noncontiguous States for documentary guidelines.
Sales to Native Americans
Parts sold to Native Americans are not subject to retail sales tax if the seller delivers the part to the buyer in Indian country.
Generally, the B&O tax applies to sales to Native Americans who take delivery in Washington. However, the B&O tax does not apply if delivery is made to the buyer in Indian country and if:
- The part is located in Indian country at the time of sale
- The seller has a place of business in Indian country that is used to receive the order or distribute the part, or
- The sale of the part is solicited by the seller while the seller is in Indian country.
See Native Americans for more information.
Sales of component parts to carriers authorized to cross state boundaries by the Interstate Commerce Commission or its successor agency are not subject to the Retailing B&O tax, nor the retail sales tax. Sales of these parts are subject to the special B&O tax classification of Retailing of Interstate Transportation Equipment. Spare parts are also exempt.
See Interstate And Foreign Commerce Carriers for more information.
A component part is a part that is attached to and becomes an integral part of the motor vehicle or trailer. Such items as motors, body parts, batteries and tires are considered component parts. Less easily determined as component parts, are such parts that are required by law (i.e. fire extinguishers or those that are wired into the vehicle, such as citizen band radios, scanners and telephones). Tarpaulins specifically made for a certain trailer, even though they may be used on another, are also considered component parts.
Component parts are not specifically defined in the rules or the laws. Questions about whether an item is a component part should be referred to the Department of Revenue.