Sales tax now applies to some services

Starting October 1: Some business services are now subject to retail sales tax, as required by state law, ESSB 5814. When you buy these services, vendors should add sales tax to your bill. If you sell these services, you should begin collecting retail sales tax. Learn more about Services newly subject to retail sales tax.

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Credit and installment sales

You must submit tax for merchandise you sold on credit (i.e. installment sales) in the reporting period in which you make the sale, even though you may not receive full payment until a later date. Therefore, you owe both retailing B&O tax and retail sales tax on the full selling price when you make the sale.

Example: You sell a $2,000 watch on credit in April and allow the customer to take possession of it immediately with a $500 partial payment. You would report the sale as taking place in April, even though you did not receive full payment in that month. You should report the entire $2,000 selling price in April.

You may exclude separate charges for insurance, interest and finance charges from the selling price when determining amounts subject to retailing B&O tax and retail sales tax. However, these charges are subject to service and other activities B&O tax (WAC 458-20-198).