Retail sales tax
If your business sells retail products or provides retail services to a customer then you must collect retail sales tax. The income from retailing activity is reported under the Retailing B&O tax classification. The Retailing B&O tax rate is .471 percent (.00471) of your gross receipts.
Sales tax rates
Washington’s retail sales tax is made up of the state rate (6.5 percent) and the local sale tax rate. Local rates vary depending on the location. The sales tax rate for items delivered to the customer at the store location (over the counter sales) is based on the store location. The sales tax rate for items that are shipped or delivered to customers at another location within the state is determined by the place of shipment or delivery.
You are responsible for sending The Department of Revenue the correct tax amount, even if you have under collected or did not collect the tax from the purchaser. To determine the correct tax rate to collect, use our online Department’s Tax Rate Lookup Tool or download our mobile device app on the same page. See WAC 458-20-145 for additional information on computing local sales tax rates.
Itemizing sales tax
Retail sales tax must be separately listed on the receipt you provide your customers. The retail sales tax is collected on the selling price of an item and includes any additional charges, such as a fee for handling, shipping, or any other amount that may be separately stated on an invoice.
Collecting sales tax
Self-service copies - A customer using someone else’s duplicating equipment to make their own copies is often called “self-service copying.” Retail sales tax on this activity must be collected unless a sales tax exemption applies. The gross sales are reported under the Retailing B&O tax classification.
Copies made by mailing business for customers – Private mailing businesses often have a separate area where the business makes copies for customers. Retail sales tax is collected from the customer unless the customer gives a completed reseller permit to the private mailing business, or unless a sales tax exemption applies.
When your business manufactures and sells a product, such as making copies for a customer (manufacturing) and selling them (retailing or wholesaling) you must report the income under both the production activity and the selling activity. You then complete a multiple activities tax credit (MATC) so B&O tax is not paid twice on the same activity.
The Multiple Activities Tax Credit (MATC) form is available online. WAC 458-20-136 and WAC 458-20-13601 provide additional information on manufacturing activities.
Faxing – Retail sales tax is collected on faxing documents.
Sales of goods – All sales of tangible personal property to customers are retail sales and subject to sales tax unless specifically exempted. For example, sales of postage stamps are exempt from sales tax. A partial list of items subject to retail sales tax follows:
- Calling cards (including prepaid wireless cards)
- Greeting cards and post cards
- Stationary supplies (envelopes, paper, etc.)
- Office supplies (staples, paper clips, tape, etc.)
- Packing supplies (boxes, wrapping, labels, tape, etc.)
- Miscellaneous Items (baseball caps, T-shirts, cup holders, etc.)
Your business may be selling other items subject to retail sales tax.