Sales tax now applies to some services

Starting October 1: Some business services are now subject to retail sales tax, as required by state law, ESSB 5814. When you buy these services, vendors should add sales tax to your bill. If you sell these services, you should begin collecting retail sales tax. Learn more about Services newly subject to retail sales tax.

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Interest from sale of business assets

A business selling some of its assets may carry a contract on the sale of these assets by accepting installment payments with interest. These sales may or may not be part of its usual business activity.

  • Interest or finance charges received from an installment sale are subject to service and other activities business and occupation (B&O) tax.
  • If the installment sale was a casual or isolated sale, then B&O tax does not apply to the sale, including the interest portion of the installment payments.

References:

Casual or isolated sale:  RCW 82.04.040

Reporting installment sales: WAC 458-20-198(2)(b)

Finance Charges, carrying charges, interest, penalties:  WAC 458-20-109