The Liquor and Cannabis Board (LCB) has temporarily allowed on-premises licensees (restaurants, bars, taverns, etc.) to sell factory-sealed bottles of spirits to consumers with the sale of food curbside or by delivery. These types of spirits sales by on-premises licensees are allowed only for the duration of the Governor’s proclamation temporarily banning on-premises dining, and are permitted only if the spirits are purchased with food or a meal. (For more information and updates about these temporary changes, please visit the LCB website at lcb.wa.gov.)
This article addresses the tax implications of these types of sales on spirits distributors and on-premises licensees.
Impact on businesses selling spirits
For the time period that the LCB is allowing on-premises licensees to make curbside and delivery sales of spirits with food, the taxes and rates that apply to sales of spirits in factory-sealed bottles is the same as the sales of spirits by the drink. Taxes and rates apply as follows:
Collect from on-premises licensees:
- Spirits sales tax at 13.7%.
- Spirits liter tax at $2.4408/liter.
Collect retail sales tax on the selling price of the bottled spirit in the same manner as spirits sold by the drink.
Note: Business and occupation (B&O) tax applies to the gross income of distributors and on-premises licensees. Sales of spirits are not subject to litter tax, even when the spirits are delivered to the customer off premises.
What about beer and wine sales?
In response to the Governor’s proclamation temporarily banning on-premises dining, the LCB also allows for sales of beer and wine curbside and by delivery when the customer also orders food or a meal. However, there are no specific additional taxes that apply to beer or wine sales. Therefore, B&O tax, retail sales tax, and litter tax apply to such sales in the typical manner.