Wineries are often asked to donate bottles of wine or other products for charitable causes. Goods donated to nonprofits without any intervening use are not subject to retailing B&O tax or sales tax (since they are given away without a charge). The donor (winery) also does not owe use tax on the value of the wine.
Note: You must keep documentation supporting the donation in your records.
Wineries often sell pre-packaged foods such as:
Sales of pre-packaged foods are generally exempt from sales tax. However, the income from these sales remains subject to Retailing B&O tax.
In addition to wine and food, wineries often sell tangible personal property such as:
You must collect retail sales tax on sales of tangible personal property to consumers who take delivery in Washington. Additionally, such sales must be reported under the Retailing classification of the B&O tax.
Gratuities received voluntarily are exempt from retail sales tax and Retailing B&O tax. However, when a business adds the gratuity amount to the check, bill, receipt, etc., retail sales tax and Retailing B&O tax apply. When the gratuity is not clearly voluntary, it becomes part of the selling price subject to tax.
Reseller permits are free and will be issued to businesses that make wholesale purchases. The permits allow businesses to purchase items or services for resale without paying retail sales tax. Examples of items a winery might purchase for resale include, but are not limited to:
Washington offers over 50 tax incentive programs to eligible businesses. These incentives are to encourage the creation and preservation of family-wage jobs, especially in areas with high unemployment. Programs that may apply to businesses in the wine industry include, but are not limited to:
Litter tax is due on manufacturers, wholesalers, and retailers of certain products. Examples of products subject to litter tax include, but are not limited to:
Certain retail sales are not subject to litter tax:
When you take tangible personal property (grapes) and, by applying labor or skill manually or by machinery, turn the grapes into a new and different product (wine) that will be sold, you are conducting a manufacturing activity.
Income from the sale of wine made from purchased fruit juice or slurry should be reported under the Manufacturing B&O tax classification. This income must also be reported under the Wholesaling or Retailing classification.
Out-of-state wineries may sell wine directly to Washington consumers. However, the winery must collect the appropriate state and local sales or use taxes from their customers and send the tax to the Department of Revenue.
Before an out-of-state winery can sell and ship directly to Washington consumers, it must:
Generally, spirits tax does not apply to wine. However, spirits tax does apply to wine exceeding 24% alcohol by volume as indicated on the label.
For more information please see our Spirits (hard liquor) liter tax web page.
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