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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  5. Custom-made Jewelry, Engravings Or Other Fabricated Items

Custom-made jewelry, engravings or other fabricated items

The production, creation, customization or fabrication of jewelry is a manufacturing activity. Therefore, you owe manufacturing B&O tax on your charges to produce, create, customize, engrave or fabricate jewelry. You owe manufacturing B&O tax on the gross selling price of the merchandise.

Manufacturing B&O tax applies even if you deliver the merchandise to the customer outside of Washington. You also owe retailing B&O tax and retail sales tax on your sales to Washington consumers. However, you may claim a multiple activities tax credit (MATC). This credit applies so that you actually only pay B&O tax once on the product even though you report under two B&O tax classifications.

If you make or customize jewelry from materials and supplies that your customer provides you, the income you receive is subject to B&O tax under the Processing for Hire classification (WAC 458-20-136 and WAC 458-20-19301).