Motor vehicle fuel sales
Motor vehicle fuel is gasoline or other in flammable gas or liquid that is used for the propulsion of motor vehicles. Motor vehicle fuel includes the following:
Sales of motor vehicle fuel are not subject to retail sales tax; however, special fuel taxes do apply. Fuel taxes are paid to the distributor when fuel is purchased, and are passed on to the consumer. The sale of motor vehicle fuel is reported under the retailing and retail sales tax lines on the excise tax return.
A business selling motor vehicle fuel is allowed a deduction from the B&O retailing tax for the combined amount of state and federal fuel taxes paid. This deduction is itemized on the deduction detail page (0205 – Motor Vehicle Fuel Tax).
A deduction is also allowed under retail sales tax for the total amount of motor vehicle fuel sold at the pumps. The deduction is itemized on the deduction detail page (0119 – Motor Vehicle Fuel Sales). WAC 458-20-126
Vending machine sales
Vending machines, which sell a variety of items, are frequently placed in convenience store and gas station locations. When the owner of the convenience store or gas station owns the vending machines, the owner is responsible for collecting and remitting applicable taxes.
However, vending machines are often owned by someone other than the owner of the convenience store or gas station. In this case, amounts received as compensation for allowing the placement of the machines on property of the convenience store or gas station are reported under the Service & Other Activities B&O tax classification as a license to use real property.
Collecting sales tax through a vending machine
Retail sales tax applies to sales of merchandise that is sold through a vending machine. Gross receipts are subject to retailing B&O tax.
Examples of merchandise sold through vending machines include items such as cigarettes, toiletries, maps, and toys. See WAC 458-20-187 for additional information.
Taxes on games
Convenience stores and gas stations may offer entertainment in the form of games. The convenience store or gas station may own the games or receive commissions for allowing the games to be placed in their business location.
Commissions: Income in the form of commissions for allowing the placement of vending machines or games is subject to B&O tax under the Service & Other Activities tax classification.
Lottery tickets: The purchase of lottery or scratch tickets by a consumer is not subject to retail sales tax. The convenience store or gasoline station owner reports commissions received from such sales on the excise tax return under the Service & Other Activities B&O tax classification.
Pool/darts/shuffleboard: These activities are considered retail sales and are subject to retail sales tax. Gross receipts are reported under the Retailing B&O tax classification.
Video games/amusement devices: This includes slots, pinball, electronic darts, and machines or devices that permit the patron to see, hear or read something of interest. Gross receipts are subject to B&O tax under the Service & Other Activities tax classification.
Note: Sales tax or use tax applies to the purchase of the machines.
Internet access: Gross receipts for allowing customers access to the Internet is subject to B&O tax under the Service & Other Activities tax classification.
Pull tabs and punchboards: The “increase” (see following note) from pull tab and punchboard games is subject to B&O tax. Those reporting $50,000 or more per year of income from contests of chance will report under the new Gambling Contests of Chance ($50,000 a year or greater) B&O tax classification. Businesses reporting less than $50,000 in income per year from contests of chance report under the Service & Other Activities B&O tax classification. See Special Notice - Temporary B&O Tax Rate Increase
Note: “Increase” means gross gambling receipts less the monetary value, or in the case of merchandise, the actual cost, of any prizes awarded. Actual cost is the amount actually paid (without markup). For donated merchandise, cost is the fair market value. WAC 458-20-187, Special Notice – Tax Reporting for Consignment Sales