If you sell goods (art or craft work, etc.) through a consignment arrangement, you must collect sales tax. Generally, the consignment seller remits sales tax directly to the Department (on behalf of the owner of the consigned goods).
“Consignee” (or selling agent) has either actual or constructive possession of tangible personal property (the goods), although someone else actually owns the property.
“Constructive possession” means possession of the power to pass title of tangible personal property (the goods) to others. WAC 458-20-159
Reporting instructions for consignee selling in the name of the owner:
- Report consignment sales under the retailing B&O tax classification. You may take a deduction (ID 0215 – Consignment Sales) if you segregate such sales income and maintain appropriate records. WAC 458-20-159
- Report consignment sales under the retail sales tax classification. Generally, you are responsible for remitting the sales tax to the Department. However, if the owner of the goods is a registered business and normally reports sales tax, you can give the sales tax to the owner to report. In this case, you may take a deduction from the retail sales tax (ID 0199 – Other), as long as you write the reason as “sales tax given to owner.”
- Report any commissions that you earn from consignment sales under the service and other activities B&O tax classification.RCW 82.04.290
Reporting instructions for consignee (winery) selling in its own name:
- Report consignment sales under the retailing B&O tax classification.
- Report consignment sales under the retail sales tax classification.
- Consignees selling in their own name do not report commission income.
For tax reporting instructions for the owner of the goods, see our Special Notice “Tax Reporting for Consignment Sales.” (pdf)