Washington Sales Tax Exemptions / Tax Free Items Washington: Sales Tax Handbook

Washington:

What purchases are exempt from the Washington sales tax?

While the Washington sales tax of 6.50% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in Washington.

Sales Tax Exemptions in Washington

In Washington, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers.

Several exceptions to the Washington sales tax are the majority of agricultural farm products, producer goods (such as manufacturing machinery, fishing boat fuel, airplane computer costs, etc.), interstate sales (such as Alaska and Hawaii purchases, nonresident's rental cars, or vehicles acquired in the military), public activities(such as ferry boats and watershed and flood protection), health-related purchases (such as blood and tissue banks, prescription or over the counter drugs, or human body parts), and deferrals and credits.

Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for Washington:


Clothing

  6.5%

Groceries

  EXEMPT

Prepared Food

  10%

Prescription Drugs

  EXEMPT

OTC Drugs

  6.5%

These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.

Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":


Is candy taxable in Washington? Candy IS considered a grocery in Washington
Is soda taxable in Washington? Soda is NOT considered a grocery in Washington

Are services, shipping, installation, etc taxable in Washington?

The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the Washington sales tax see the Washington sales taxability FAQ page.


Other tax-exempt items in Washington

This table lists a number of additional categories of goods and services that are exempt from Washington's sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in Washington.

Category Exemption Status
Food and Meals
Grocery Food EXEMPT
Manufacturing and Machinery
Machinery EXEMPT *
Raw Materials EXEMPT
Medical Goods and Services
Medical Services EXEMPT
Newspapers and Magazines
Newspapers EXEMPT *
Occasional Sales
General Occasional Sales EXEMPT *
Optional Maintenance Contracts
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts EXEMPT
Services
Janitorial Services EXEMPT *
Transportation Services EXEMPT *
Software and Digital Products
Custom Software - Delivered on Tangible Media EXEMPT
Custom Software - Downloaded EXEMPT
Customization of Canned Software EXEMPT
Trade-Ins
General Trade-Ins EXEMPT

* See notes in category taxability page for details



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Source: http://www.salestaxhandbook.com/washington/sales-tax-exemptions