1. Home
  2. Taxonomy
  3. Term
  4. TPS-TIE

TPS-TIE

Gift cards, gift certificates, and layaway purchases

When do I report gift cards and gift certificates?

Taxes do not apply to gift cards and gift certificates at the time of sale.

Businesses who issue gift cards and gift certificates should report income when the customer redeems the card or certificate. If sales tax applies to the sale, then the seller should collect retail sales tax at the time of redemption. The amount redeemed on the card or certificate is subject to business and occupation (B&O) tax according to the goods or services provided in exchange for the card or certificate.

Direct pay program

What is the direct pay program?

Direct pay is a program that allows approved businesses to buy goods without payment of sales tax to the seller at the time of purchase. Instead, businesses provide a direct pay permit to their vendor and pay the sales and use taxes due directly to the Department of Revenue (DOR).

Water rights transfers

Real estate excise tax applies to water rights when the rights are transferred separate from the land. The tax applies when an existing water right is transferred for valuable consideration.

What is a water right?

A “water right” is a legal authorization to use a certain amount of public water for a designated purpose. 

Water rights can be changed or transferred. The change or transfer must be authorized by the Department of Ecology pr county Water Conservancy Boards.

Commute Trip Reduction Tax Credit Extended to June 30, 2025

Intended audience: Employers who provide commute trip reduction incentives to employees.

Engrossed Substitute House Bill 2134 extends the Commute Trip Reduction tax credit through June 30, 2025. The credit was due to expire July 1, 2024. Employers may now earn the credit for incentives paid to employees through December 31, 2024.

Please note the accrual period was not extended for property managers. The accrual period for a property manager that provides incentives to persons employed at a worksite managed by the property manager expired on December 31, 2023.

B&O Tax Deduction Related to Qualified Dispute Resolution Centers

Qualified Dispute Resolution Centers may take a business and occupation (B&O) tax deduction for amounts received as contributions from federal, state, or local governments and nonprofit organizations for providing dispute resolution services.

A deduction from B&O tax is also provided to nonprofit organizations for amounts received from federal, state, or local governments for distribution to a qualified dispute resolution center.

(Senate Bill 6159 [Chapter 249, Laws of 2012])

Taxability of Selling Harvested Mushrooms and Other Forest Products

This notice is intended to clarify your tax responsibilities if you sell forest products obtained from state, federal, or private lands.

Any buyer or processor of cedar or specialty wood products must be registered with the Washington Department of Revenue.

If your income is $12,000 or greater per year or you owe retail sales tax, you must register with the Washington Department of Revenue and report sales of mushrooms and other forest products (plants, branches, moss, etc.) in this state as explained below.

Business and Occupation Tax:

Public utility tax credit for billing discounts and qualifying contributions – annual update and notification of repeal

Intended audience: light and power businesses and gas distribution businesses.

Note: This credit is repealed effective Jan. 1, 2026. The credit is calculated based on the entire 2026 fiscal year. However, credits cannot be claimed after Dec. 31, 2025.

Subscribe to TPS-TIE