If you pay sales tax where you park your car every day and your friend, who parks at another location doesn't, you may wonder what the difference is. Whether sales tax is due depends on:

• the duration of your parking agreement, and
• if you have an assigned spot.

Hourly metered parking

Parking fees for hourly parking in garages or parking lots are subject to sales tax. It makes no difference whether the parking structure is owned by the local government or private enterprise. It also makes no difference whether the lot is attended or unattended.

If you park at an attended lot or garage, the posted hourly charges may note that sales tax is included in the price. This indicates that the amount you pay includes both the selling price and the retail sales tax. Also, see our Tax Topic article titled Advertising - Tax Included in the Price for more information.

If you park at an unattended lot or garage and “feed” money into a meter or box, the lot operator can back the tax out of the total amount received. Whether the lot is attended or not, the owner pays retailing business and occupation (B&O) tax on the parking charge and also remits the sales tax.

City/county metered parking

Sales tax does not apply to metered parking on county- or city-owned streets. This is because meters are considered traffic regulation devices. Traffic regulation is considered to be exclusively a governmental activity. Consequently, fees collected by the city for on-street metered parking and on-street parking permits are not subject to either sales tax or B&O tax. (See WAC 458-20-189 for additional information.)

Monthly parking

Sales tax does not apply if you rent a designated parking space for your exclusive use for 30 days or longer. Such parking is considered a rental of real estate and is not subject to sales tax or B&O tax. (Note: Leasehold excise tax applies when designated parking spaces are leased for 30 days or longer from federal, state, or local government.)

Sales tax is due if you pay for monthly parking and don’t have a designated space or stall. Your ability to park may be limited to a certain floor or number of spaces. This is not a designated space for your exclusive use. Consequently, the rental is not a rental of real estate and the parking business must collect sales tax. In addition, the parking business owes B&O tax under the retailing classification.

For more information about the taxability of parking fees, see WAC 458-20-118 and ETA 3030.2009.