Wine manufactured from fresh fruit
Special B&O tax exemptions are available for wine manufacturers that manufacture wine from fresh fruit.
What the exemptions provide
RCW 82.04.4266 provides a B&O tax exemption for the following tax classifications and activities:
- Manufacturing B&O tax - the value of products sold by fresh fruit or vegetable manufacturers, and
- Wholesaling B&O tax - products manufactured and sold by the manufacturer at wholesale to a buyer that transports the product outside Washington in the normal course of business.
These exemptions expire on July 1, 2025. When they expire, they will be replaced with a reduced B&O tax rate of 0.138 percent (RCW 82.04.260 (1)).
Special B&O tax classifications and deductions have been added to My DOR for reporting income from the manufacturing of fresh fruit products. For information on how to report and other requirements, see our Special Notice, Fresh Fruit or Vegetable Manufacturers B&O Tax Exemptions Extended – Change in Filing Requirements.
Wine manufactured from other than fresh fruit and other manufactured products
If the business manufactures products not produced from fresh fruit, including wine made from purchased fruit juice or slurry, that income should be reported under the Manufacturing B&O tax classification or another manufacturing classification, if appropriate. The income must also be reported under the Wholesaling or Retailing B&O tax classification. For wholesale sales, you must receive a reseller permit or other approved exemption certificate from the buyer to document the wholesale nature of the transaction. For more information, see our Manufacturing Industry Tax Guide and WAC 458-20-136.
Retail sales of wine and other products
Retail sales of wine and other tangible goods delivered to consumers in Washington are subject to the B&O tax under the Retailing classification. Such sales are also subject to retail sales tax, which is discussed in detail in the “Sales of Goods and Services” section of this guide.
Marijuana, useable marijuana, and marijuana-infused products, including marijuana concentrates are not fresh fruits:
Marijuana, useable marijuana, and marijuana-infused products, including marijuana concentrates, are not fresh fruits for purposes of the B&O tax. This means marijuana processors do not qualify for the B&O tax exemptions or preferential rates for businesses that process fresh fruits. RCW 82.04.4266.