The law provides several sales and use tax exemptions for farmers. For qualifying purchases, you must provide the seller of the goods or service with a completed exemption certificate to document the nature of the sales tax-exempt purchase.
1. Wholesale purchases: Purchases by a farmer of goods that he/she uses to produce an agricultural product that will be sold are not subject to sales tax. When purchasing such items, you must give the seller a reseller permit. Examples include:
- Root stock.
- Agents for enhanced pollination (including bees).
- Chemical sprays or washes.
- Containers, packaging, and wrappers sold by a farmer along the agricultural product (there can be no intervening use).
Purchases for dual purposes
If you (a farmer) purchase certain goods for both your own consumption and for the purpose of reselling the goods, the taxability of the purchase is determined at the time of purchase by how you primarily (over 50% of the time) use the goods purchased according to the nature of your business.
If you normally consume the goods yourself, then you must pay sales or use tax on the purchase (unless the items are exempt from sales tax.) If, at a later point, you resell part or all of the goods, then you may recoup the sales tax paid by claiming a “taxable amount for tax paid at source” deduction on your Department of Revenue tax return.
Conversely, if you principally resell the goods purchased, then you should give a reseller permit to the seller. If you end up using some of the goods yourself, you should pay deferred sales tax to the Department on the value of the goods used. Deferred sales tax is paid on the Department of Revenue tax return in the use tax section. See WAC 458-20-102 for additional details.
Note: Effective January 1, 2010, the resale certificate was replaced with a reseller permit issued by the Department of Revenue. Reseller permits are free and are issued to businesses that make wholesale purchases. The permits allow businesses to purchase items or services for resale without paying retail sales tax.
How do I get a reseller permit?
If you did not receive a reseller permit you may submit an application.