Retail sales tax

• What is retail sales tax?
• What exemptions are available?
• Are sales to tribal members subject to retail sales tax?
• What is marketplace fairness?
• What is streamlined sales tax?
• What is destination-based sales tax?

What is retail sales tax?

Retail sales tax is Washington’s principal tax source. Businesses making retail sales in Washington collect sales tax from their customer.

Here is some helpful information

• Generally, a retail sale is the sale of tangible personal property.
• It is also the sale of services such as installation, repair, cleaning, altering, improving, construction, and decorating. Other services include improving real or personal property, retail recreational services, and lawn maintenance. See Services subject to sales tax for examples of retail services. Sales of digital products to consumers are also retail sales.
• Retail sales tax includes both state and local components.
• Sales tax amounts collected are considered trust funds and must be remitted to the Department of Revenue.
• The seller is liable to the Department of Revenue for sales tax, even if it is not collected.
• Use tax is paid by the consumer when retail sales tax was not collected by the seller/service provider.
• Businesses that make a purchase for resale must provide a reseller permit to the seller. If not, the seller must charge the buyer retail sales tax on the total purchase.
• Businesses must pay retail sales tax on purchases for their own use (such as supplies, equipment, or retail services) that will not be resold in the regular course of business.

What exemptions are available?

Common exemptions include:

• Food
• Prescription Drugs
• Sales to Nonresidents
• Federal Government Sales
• Interstate and Foreign Sales
• Manufacturers’ Machinery and Equipment Exemption
• Sales to Indians or Indian Tribes
• Newspapers

For a complete list of exemptions, see our list of retail sales and use tax exemptions.

Are sales to tribal members subject to retail sales tax?

Retail sales tax is not imposed on sales to Indians if the tangible personal property is delivered to the member or tribe in Indian Country or if the sale takes place in Indian Country. See our Indian Tax Guide for more information.

What is marketplace fairness?

Certain marketplace facilitators and remote sellers are required to collect and submit retail sales tax on sales into Washington. For more information, see our Marketplace Fairness webpage.

What is streamlined sales tax?

The Streamlined Sales and Use Tax Agreement (SSUTA) is a cooperative effort of multiple states, local governments and the business community. SSUTA pro­vides for a simpler and more uniform sales and use tax structure for businesses selling into multiple states. For more information, see our Streamlined sales tax webpage.

What is destination-based sales tax?

Retailers must collect local sales tax based on the location where the customer receives the merchandise or service – “destination-based sales tax.” For more information, see our Determine the location of my sale webpage.