What is a wholesale sale?
Generally, a “sale at wholesale” or “wholesale sale” means a sale of tangible personal property (including articles you produce or manufacture) to a business or person who will resell the articles in the regular course of business or incorporate the article into another product that will be sold.
Sales of wine or other tangible personal property to persons that will resell the product in the regular course of business are wholesale transactions. When delivered to the buyer in Washington, the gross income from such sales is subject to B&O tax under the wholesaling classification. You must receive a reseller permit from the buyer to document the wholesale nature of the sale. You are required to keep the documentation for up to five years after the sale.
Wholesale sales of wine or other tangible personal property that are delivered to the buyer outside of Washington are not subject to B&O tax. The income from such sales must be included in the amount reported for wholesale sales on your tax return, but you should deduct the sale amounts that are delivered out-of-state under the Interstate and Foreign Sales deduction. You must receive a reseller permit or other approved exemption certificate from the buyer to keep in your records.