Washington residents who purchase a vehicle outside of the state and bring it into Washington owe use tax on the value of that vehicle.
Use tax is due on the use of goods in the state when Washington sales tax has not been paid. Goods used in this state are subject to either sales or use tax, but not both on the same transaction.
Gratuities (tips) received voluntarily are exempt from retailing business and occupation (B&O) tax and retail sales tax. However, when a business adds the gratuity amount to the check, bill, receipt, etc., retailing B&O tax and retail sales tax apply. When the gratuity is not clearly voluntary, it becomes part of the selling price subject to tax.
The business must prove that a gratuity was received voluntarily when gratuities are added to the check, bill, receipt, etc., by the business.
‘Tip’ jars
Income received from patents may be subject to business and occupation (B&O) tax. The taxability of the income depends on whether the amounts are business or non-business income.
Income from patent royalties and patent sales is subject to B&O tax when received as a regular part of business activities. Three examples of taxable patent income include:
Aircraft operated by air carriers authorized and certified by the United States Department of Transportation or another federal or foreign authority to engage in the transport of persons or property in interstate or foreign commerce qualify as “transportation equipment.” Aircraft that do not qualify as “transportation equipment,” are considered “non-transportation aircraft.”
HB 1550 did not affect the nonprofit B&O and sales and use tax exemptions found in RCW 82.04.4271 and 82.08.0291, respectively. In the past, certain nonprofit youth organizations qualified for a business and occupation tax and retail sales tax exemption on membership fees and certain service fees, and they remain eligible for these exemptions.
In order to qualify for the exemption from B&O tax and the deduction from retail sales tax, a nonprofit youth organization must be:
Supplemental Nutrition Assistance Program (SNAP) refers to a food assistance program that is administered by the United States Department of Agriculture (USDA), and was formerly known as the Food Stamp Program. SNAP and other successor programs are shown below as “benefit(s)”.
Benefit eligible products are exempt from retail sales tax when purchased with benefits issued by the USDA.
Purchases are frequently paid for with a combination of benefits and cash. Benefits should be applied to benefit eligible items that are subject to sales tax (“nonexempt” items).
Construction contractors and utility companies sometimes need to gain access to areas beneath a road. This usually requires the removal and subsequent replacement of a portion of the road surface – a “paving cut.”
The taxability of persons making paving cuts depends upon the nature of the contract under which the paving cuts are made, and also on who owns the road.
Right now, charges for providing consumers with the opportunity to dance are not subject to retail sales tax. The income received from those charges, usually called “cover charges”, is subject to the service and other activities business and occupation (B&O) tax. However, before HB 1550 passed, this treatment was temporary in nature - the treatment was scheduled to expire on July 1, 2017. On that date, cover charges would have reverted back to being a retail sale, subject to retail sales tax for consumers.
There are two common fuels sold by marinas:
Federal
Federal fuel tax – (IRS)
State
State fuel taxes
The terms “lobbyists” and “lobbying firms” are used interchangeably on this page since they are taxed similarly.
Independent lobbyists and lobbying firms are subject to the business and occupation (B&O) tax under the Service and Other Activities classification on their gross income.
B&O tax applies to the “gross proceeds of sales” without any deductions for costs of property sold, costs of materials used, labor costs, delivery costs, expenses paid, or losses.
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