Common sales tax exemptions:
- Sales for resale: When a customer provides you with a reseller permit, you do not collect sales tax on the sale transaction. The Reseller Permit documents that the buyer plans to resell the products in the regular course of business. You must maintain the documentation in your records for up to five years. The sale is reported on the tax return under the wholesaling B&O tax classification. WAC 458-20-102
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. For more information, see our Reseller Permit page.
Sales of prepackaged foods (ID 0122): Generally, food products that are sealed, canned, boxed, bottled, or otherwise packed and sealed by someone other than the seller are exempt from sales tax as food products. RCW 82.08.0293 and WAC 458-20-244
You must include the amounts from such sales in your gross income reported for retailing B&O tax and retail sales tax, but may take the “Exempt Food Sales” deduction (0122) for retail sales tax. The income remains subject to retailing B&O tax. Examples include:
- Chocolates, nuts, dried fruit
- Crackers, cookies
- Mustards, spreads
This exemption does not apply to:
- Alcoholic beverages
- Drinks that are sweetened, contain 50% or less fruit or vegetable juice, or contain no milk or milk substitutes
Prepared foods – foods that meet the following criteria:
- Food sold with eating utensils provided by the seller.
- Utensils include plates, knives, forks, spoons, glasses, cups, napkins, or straws
- Utensils do not include containers or packaging used to carry the food, such as a container for potato salad
Food and food ingredients sold in a heated state or heated by the seller, except bakery items.
- Examples: grilled sandwiches, soups
Two or more food ingredients mixed or combined by the seller for sales as a single item, unless the product:
- Is only cut, repackaged, or pasteurized by the seller
- Contains raw eggs, fish, meat, poultry, and food containing these raw foods that require cooking by the consumer as recommended by the FDA to prevent food borne illness.
If sold without eating utensils provided by the seller, prepared foods do not include:
- Bakery items
- Food sold by weight or volume as a single item in an unheated state
- Food sold by a food manufacturer per NAICS sector 311, except for bakeries.