As a business, you must submit the sales tax you collected. For your return, do the following:
Write your gross amount of income in column 1. This amount must be the same as the gross amount for retailing in your Business and Occupation Tax section. (If you are a printer and publisher or a processor for hire, special instructions apply. Please call for help if necessary.)
You may qualify for deductions. Write the total deductions in column 2. If you have no deductions, write "0" in column 2. If you have deductions, itemize them on the deduction detail sheet (pages 3-4).
Subtract column 2 from column 1. Write this amount in column 3. This is your taxable amount.
- Multiply the taxable amount in column 3 by the tax rate shown in column 4 (.065) and write this amount in column 5.
Use Tax applies to the value of all articles you used in your business (as opposed to being sold to a customer) on which no Washington sales tax has been paid. If this applies to your business, do the following:
Write the value of articles used in column 1.
Multiply the value of articles by the rate shown in column 4 (.065). Write the total in column 5.
- Total the tax due amounts in column 5. Write this amount in the Total State Sales & Use Tax box.
Why do we collect State Sales Tax?
Sales tax is collected for the benefit of multiple taxing authorities. Each taxing authority such as the state of Washington, cities, and regional authorities such as the Regional Transit Authority can add to the sales tax charged. The total tax is collected and then distributed to each of the taxing authorities.
Example to show how the taxes collected in Seattle are distributed:
The List of Local Sales & Use Tax Rates & Changes lists all the rates within the state of Washington. It is arranged by county, so for the Seattle example, go to King County and then find Seattle. Seattle is location code 1726. The 10.1% sales tax rate in Seattle is collected and then distributed as follows: 6.5% goes to the state of Washington, 2.7% will go to the City of Seattle, and .9% will go to the Regional Transit Authority. These 3 rates add up to the 10.1% total rate.
Important note: The tax rate used in this example is subject to change.