When a person sells a business, the tax requirements vary with what is being sold. Sales of some assets are subject to the business and occupation tax and/or sales tax, while others are not.
Sales of capital assets and consumable supplies are not subject to business and occupation tax (B&O) if the seller does not regularly sell this type of property. These sales qualify for the "casual or isolated sale" B&O tax deduction. However, this does not relieve the seller from the obligation to collect retail sales tax on such sales .
Examples of capital assets include:
Consumable supplies include:
The sale of inventory is subject to B&O tax. If the seller obtains a copy of the buyer's reseller permit then the sale is subject to the wholesaling B&O tax. If a reseller permit is not provided, retailing B&O and retail sales tax applies.
Sales of intangible assets, such as good will, are not subject to either B&O tax or retail sales tax (casual sales).
Persons selling their business must file a final tax return, with payment, within 10 days of the sale. If you do not have a current tax return, use the Multi-Purpose Combined Excise Tax Return.
Generally, the county treasurer's office must be contacted when a business is sold. Property tax must be paid to the county treasurer if the property will be sold, destroyed, disposed of, or removed from the county.
If you have questions about the personal property tax, contact your local county treasurer or assessor.
Sales of real estate are subject to the real estate excise tax which is paid to the county treasurer when the change of title is recorded. Also, sales of the controlling interest (50 percent or more) of an entity (corporation, LLC, partnership, etc.) that owns real property located in Washington are also subject to real estate excise tax.