TPS-TIE

See the Games, Gambling and Similar Income guide.

Retail sales tax and retailing B&O tax do not apply to gratuities (tips) received under circumstances that are clearly voluntary. However, if a gratuity is added by the business to the check, bill, receipt, etc., such that it is not clearly voluntary, the charge becomes part of the selling price subject to retail sales tax and retailing B&O tax.

When gratuities are added to the check, bill, receipt, etc., by the business, the business has the burden to prove that the gratuity is clearly voluntary.

Can I include the sales tax in my sales price?

Sales tax must always be separately stated on the sales receipt that is given to the customer. However, there are instances when the sales tax may be included in the advertised price.

A business may advertise and/or sell meals, beverages, or other items at prices including sales tax but only if the menu and other price information clearly indicate that sales tax is included in the price.

Sales of Dietary Supplements are subject to retail sales tax. Dietary supplements include any product, other than tobacco, that is intended to supplement the diet and that meets all three of the following criteria:

Soft drinks are subject to retail sales tax.

Should sales tax be collected when sales are made through a vending machine?

Retail sales tax applies to sales of merchandise that are sold through a vending machine. Gross receipts are subject to retailing B&O tax.

Merchandise includes items such as cigarettes, toiletries and toys.

The person that owns the machine should report and pay the tax. The owner may back out the amount of sales tax from the total amount received in the machines to arrive at the gross taxable amount.

Based on your business activities the taxes below may apply to your business.

Carbonated beverage tax

The carbonated beverage tax (CBT) was repealed by Initiative 1107, effective December 2, 2010. Businesses are not subject to the carbonated beverage tax after that date. 

Other local taxes

In addition to collecting the state and local sales tax, sellers in certain locations may be required to collect additional local taxes.

What is “unclaimed property?”

Unclaimed property is money or intangible property held for a period of time with no owner contact. The Washington Unclaimed Property Act protects unclaimed property until it is returned to its rightful owner or their heir. The Department of Revenue acts as custodian for safe keeping of the property until the rightful owner can be located. When reported to the Department, abandoned property is available for refund to the owner or legal claimant indefinitely.

School districts are considered municipal corporations and are required to collect and remit:

School districts are not eligible to make purchases using a reseller permit. Because school districts do not typically collect retail sales tax, they must pay retail sales tax on all retail items they purchase (see below).

Taxable and nontaxable purchases

School districts must pay retail sales tax or use tax on the following goods and services: