Use tax is a tax on the use of goods or certain services in Washington when sales tax has not been paid. Goods used in this state are subject to either the sales or use tax, but not both.
Use tax is based on the value of the article or service and includes charges for labor, materials, freight, handling, or any other amount paid or accrued when separately stated on an invoice.
Examples of when use tax is due include:
If you purchase items for resell, you need to complete and submit a reseller permit to the seller (person or business you went through). If the seller does not receive a properly completed reseller permit they must charge you (the buyer) retail sales tax.
Reseller permits may only be used to purchase property or services that are:
If you sell the following items, you are subject to litter tax:
These products contribute to Washington’s litter problem. This tax is reported and paid on your Excise Tax Return. Visit Washington Administrative Code (WAC) 458-20-243 for additional information.
For assistance or questions call 360-705-6705.
If you have a tax-related question specific to your business, you may request more specific help. You can email the department at rulings@dor.wa.gov and we will send you a binding tax ruling, which is a letter that describes your tax obligation in greater detail. You must include the business name and other business details you find important. Tax rulings are binding on both the taxpayer and the Department of Revenue.
Business and Occupation Tax: The B&O tax applies to you if you conduct business activities in Washington. The tax is a gross receipts tax. This means there are no deductions for labor, materials, taxes, or other costs of doing business. There are different reporting classifications for various business activities. Each classification has its own tax rate. If you perform more than one activity, you may be subject to B&O tax under more than one classification.
Customers use your business to store items inside portable storage containers. These containers can be left at the customer’s location (on-site self storage) or be taken back to your warehouse for safekeeping.
Portable self-storage business uses storage containers, trucks and lifts to load and unload storage containers to and from the trucks.
For a fee, your business will move the storage containers from one place (house or office), to a different place. This is done under the customer’s direction (curb-to-curb delivery service).
This guide was created to assist persons engaged in the selling of prepared food and other related businesses to better understand the Washington State taxes that apply to their businesses. Some of the businesses included are restaurants, cafes, caterers, coffee shops, drive-in restaurants, snack bars, bakeries, personal chefs and some grocery stores.
Restaurants and similar type businesses are responsible for paying a variety of taxes based upon the activities they conduct. The most common of these taxes include: business and occupation (B&O) tax; Retail Sales Tax, & Use Tax. A brief description of each tax follows.
The most common B&O tax reporting classifications for restaurants and similar businesses include: retailing, wholesaling, and service and other activities.
Washington law exempts most grocery type food from retail sales tax. However, the law does not exempt “prepared food,” “soft drinks,” or “dietary supplements.” Businesses that sell these “foods” must collect sales tax. In addition, all alcoholic items are subject to retail sales tax.
Restaurants and similar businesses are considered consumers when purchasing goods or retail services for its own use and must pay retail sales or use tax when purchasing the following:
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