Use tax

What is use tax?

Use tax is the tax which is assessed on the use of any tangible personal property in Washington, on which retail sales or use tax has not already been paid.

When is it due?

Use tax becomes due when the untaxed tangible personal property is first put to use in Washington.

Option to pay sales vs. use tax?

If a seller is registered to do business in Washington, the seller is obligated to collect retail sales tax from the buyer and the buyer is obligated to pay retail sales tax to the seller (assuming no sales tax exemption applies). Although the buyer has no option to chose which tax to pay, if the seller failed to collect the sales tax properly, that failure does not relieve the buyer from either (1) remitting the sales tax to the seller if subsequently requested by the seller, or (2) remitting use tax in lieu of the sales tax for goods and services used in Washington.

Credit for sales or use tax paid elsewhere

When a local buyer purchases tangible personal property out of state, a dollar-for-dollar credit against the use tax may be taken for the amount of sales tax or use tax paid in the other state or country.

Canada's goods and services tax (GST) is not a sales tax (it is a value-added tax) and is therefore not allowed as a credit against the use tax.

Amount subject to tax

The use tax is due on the value of the goods when they are first put to use in Washington. Items which are purchased without payment of the retail sales tax and immediately put to use in Washington are generally subject to the use tax measured by the purchase price. When the item is first put to use outside Washington, and/or the purchase price does not represent the true value of the item, the value should be determined by using the retail selling price of similar products of like quality and character. When the items are vehicles, the NADA or Blue Book may be used.

Rate of use tax

The use tax is separated into two parts just like the retail sales tax. The state portion is 6.5%. The local portion varies depending on where the goods are put to use.

Example: A Seattle automobile dealership will pay 8.8% use tax on shop supplies consumed in that dealership, while an Olympia dealership will pay 8.4% use tax on the same items.

Intervening use

Often car dealers make purchases for resale, but at a later date, in the course of business, part of the merchandise is put to the dealer's own use. Use tax is due at this time. For example: a car dealer may use such items as grease, oil, anti-freeze, spark plugs, and accessories from inventory stock for use or display upon demonstrator or service cars.

Personal use

Use tax must also be reported on items purchased at wholesale through the company's account for the personal use of the owner, its executives, or employees.

Items subject to use tax

The following items could be overlooked by automobile dealers in determining their tax liability. This list is not all-inclusive. In most cases, retail sales tax will be paid on these items at the time of purchase.

Advertising material

  • Advertising recordings
  • Advertising films
  • Advertising mailers
  • Calendars
  • Give-away and prize items
  • News media for distribution
  • Plastic pennants
  • Salesmen portfolios
  • Service promotion kits

Office and showroom supplies and equipment

  • Air cooler
  • Computer and canned software
  • Dealer news
  • Computer and fax paper
  • Electric fan
  • Envelopes
  • Furniture
  • Heater key cabinet
  • Heaters
  • Magazine and other publications
  • NADA guides
  • Order books and sales invoices
  • Paper towels
  • Pegboard
  • Price lists
  • Record books
  • Spot lamps
  • Typewriters

Parts and accessories department

  • Air and water hose
  • Air guns and sprayers
  • Air compressor
  • Bins and bin labels
  • Creepers
  • Drills and bits
  • Files and pliers
  • Flashlights
  • Floor jacks
  • Grinding wheels
  • Transmission jacks
  • Hammers
  • Hydrometers
  • Index and tape
  • Jumper cables
  • Manuals
  • Maintenance of equipment
  • Paint and wheel brushes
  • Parts catalogs
  • Saws and blades
  • Screwdrivers
  • Service contracts
  • Shelving
  • Stock cards
  • Testing equipment
  • Tire changer
  • Welding equipment
  • Wrenches

Shop supplies

  • Buffer pads and sponges
  • Car wash compounds
  • Chamois
  • Fender covers
  • Floor sweeping compound
  • Masking tape and paper
  • Rags and wiping cloths
  • Mechanics cloths
  • Rubbing compound
  • Solvents and sandpaper
  • Steam cleaner liquid
  • Steel wool and acid

Building maintenance

  • Building repairs
  • Equipment repairs
  • Lime and fertilizer for shrubbery, lawns
  • Parking lot sweeping
  • Pipe fittings
  • Roofing materials
  • Wall paint
  • Window and sign painting

Mobile equipment

  • Cars for personal use
  • Demonstrators
  • Executive cars
  • Service cars and trucks
  • Warehouse stock trucks


Section 82.12, Revised Code of Washington (RCW)
Washington Administrative Code (WAC) 458-20-132
Washington Administrative Code (WAC) 458-20-145
Washington Administrative Code (WAC) 458-20-178
Excise Tax Advisory (ETA) 3005 (pdf)