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  5. Combined Excise Tax Return: State Sales And Use Tax

Combined Excise Tax Return: State Sales and Use Tax

Retail Sales Tax

As a business, you must submit the sales tax you collected. For your return, do the following:

 

  1. Write your gross amount of income. 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.)
  2. You may qualify for deductions. Write the total deductions. If you have no deductions, write "0". If you have deductions, itemize them on the deduction detail sheet (pages 3-4).
  3. Subtract deductions from gross amount. Write this amount in taxable amount.
  4. Multiply the taxable amount by the tax rate shown (.065) and write this amount in tax due.

 

Use Tax/Deferred Sales Tax

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:

 

  1. Write the value of articles used under gross amount.
  2. Multiply the value of articles by the rate shown (.065). Write the total in tax due.
  3. Total the tax due amounts. 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 10.25% sales tax rate in Seattle is collected and then distributed as follows: 6.5% goes to the state of Washington, 2.35% will go to the City of Seattle and King County, and 1.4% will go to the Regional Transit Authority. These 3 rates add up to the 10.25% total rate.

Important note: The tax rate used in this example is subject to change.

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