Nonprofit fireworks sales

An organization may be considered a nonprofit organization if any of the following conditions are met:

• Formed under the Washington Nonprofit Corporation Act.
• Qualifies as a nonprofit for federal tax purposes.
• Is a church, charity, or benevolent organization.

Selling fireworks as an independent retailer

A nonprofit organization will be considered an independent fireworks retailer if it meets all the following criteria:

• The business and the fireworks distributor enter into a purchase and sale agreement, where title to the goods is transferred to the business at or before delivery.
• The business is responsible for paying for the goods based on the type and quantity of goods received (the distributor may agree to repurchase unsold goods).
• All sales are conducted by the business who has the authority and control to sell the products, rather than the distributor.
• The business has control over the profits received from the sales.

A nonprofit organization selling fireworks as an independent retailer for a qualifying fundraiser may be exempt from paying business and occupation (B&O) tax and collecting retail sales tax. Please see our Nonprofit organizations guide for more information.

Providing a reseller permit to the fireworks distributor

Nonprofit organizations purchasing fireworks to sell to their customers must provide the distributor with a reseller permit. Nonprofits that are not required to register with the department should complete a Streamlined Sales Tax Agreement. Qualified nonprofits that are reselling fireworks at a qualified fundraising event will check box G on this form.

Selling fireworks as an agent of the fireworks distributor

A nonprofit may act as a sales agent of a distributor. For example, the nonprofit will receive and sell the distributor’s products to the public. In this case, the nonprofit will receive a commission as payment for selling the products.

Since the nonprofit is selling fireworks as an agent of the distributor, the sales will not qualify as a fundraising event. The nonprofit must collect and submit retail sales tax on all sales of fireworks to the public.

The nonprofit will:

• Report the gross sales of fireworks under retailing B&O tax.
• Take a “Consignment sales” B&O tax deduction for the gross amount of fireworks sold.
• Collect and submit retail sales tax on sales of fireworks.

The sales tax rate is based on the location of the fireworks stand or store. The nonprofit does not submit the retail sales tax to the distributor.

Commissions that the nonprofit receives as payment for selling fireworks on behalf of the distributor will likely qualify as a fundraising event. In this case, the nonprofit organization does not need to report the commission.

Special licensing requirements

Along with your business license, the Washington State Fire Marshal’s Office separately licenses businesses that engage in the manufacture, importation, sale, or use of fireworks in a public display.