Linen and uniform supply services

Income from linen and uniform supply services is subject to Retailing business and occupation (B&O) tax, and you must collect retail sales tax when the services are provided to consumers.

Linen and uniform supply services provided to other businesses who will resell the services are subject to Wholesaling B&O tax, as long as the business provides a reseller permit or valid exemption certificate. Without valid documentation, the sale is considered a retail sale subject to Retailing B&O tax and retail sales tax.

Purchases for resale

The purchase of tangible personal property for resale or as a component or ingredient of the cleaned article is a wholesale purchase. You may use a reseller permit to purchase these items without payment of retail sales tax. If you pay sales tax to the vendor, you may claim a Taxable Amount for Tax Paid at Source deduction for the value of the taxed purchases.

You may use your reseller permit to purchase items that will be rented or resold without intervening use, such as:

• Linens.
• Uniforms.
• Towels.
• Fabric softener.
• Dyes.
• Starches.

Purchases for your own use

A linen and uniform supply service is considered the consumer of items that are used to provide these services. Purchases for use as a consumer are subject to retail sales tax. If the seller does not collect retail sales tax, then you must report use tax directly to the department.

Examples of purchases by a linen and uniform supply service that are subject to retail sales tax or use tax generally include:

• Soaps, cleaning solvents, and other articles or substances that do not become ingredients of the articles cleaned.
• Equipment such as washing machines, dryers, presses, irons, fixtures, and furniture.
• Supplies such as hand tools, scissors, spotting brushes, and stationery.
• Items given to customers without charge.