Manufacturing activities

When you take tangible personal property (grapes) and, by applying labor or skill manually or by machinery, turn the grapes into a new and different product (wine) that will be sold, you are conducting a manufacturing activity.

B&O tax

Income from the sale of wine made from purchased fruit juice or slurry should be reported under the Manufacturing B&O tax classification. This income must also be reported under the Wholesaling or Retailing classification.

Multiple activities tax credit (MATC)

The MATC is a B&O tax credit that is available to manufacturers that file under more than one B&O tax classification on the sale of the same product. A credit is allowed so that B&O tax is only paid once.

To take the credit, you must complete the MATC under Credits when filing your return in MyDOR.

B&O tax exemption

Wine manufactured from fresh fruit is exempt from Manufacturing B&O tax.

Note: This exemption expires on July 1, 2025. It will then be replaced by a reduced B&O tax rate.

For a more information about manufacturing, including sales and use tax exemptions on purchases, see our Manufacturing Industry Tax Guide and WAC 458-20-136.


RCW 82.04.4266 Exemptions-Fruit and vegetable businesses.

RCW 82.04.260 Tax on manufacturers and processors of various foods and by-products.

WAC 458-20-136 Manufacturing, processing for hire, fabricating.

WAC 458-20-19301 Multiple activities tax credits.