Washington: Sales Tax Handbook
What purchases are taxable in Washington?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Washington sales tax.
Contents1.) Taxability of Goods and Services
- General Washington taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in Washington?
In the state of Washington, legally sales tax is required to be collected from tangible, physical products being sold to a consumer.
Several exceptions to this tax are certain types of groceries, prescription medicines, and newspapers. This means that the owner of a cafe would have to charge sales tax on certain types of food and drink sold, while a web designer would not have to charge sales tax at all.
Are services subject to sales tax in Washington?
Washington often does collect sales taxes on services performed. For instance, if the services provided have to do with construction services, the state of Washington will most likely see them as being taxable. Also taxable in Washington are recreation services(such as day trips for sight-seeing, and service charges of tickets for professional sporting events, and amusement services like golf or bowling), personal services (like tattooing or escort services).
Miscellaneous services are also taxed, such as catering, towing automobiles, washing vehicles, personal chefs, leasing or renting physical, personal property, network and competitive phone services, charges made by abstract, title insurance, or escrow and credit bureau businesses(which includes tenant screening services), digital automated services, remote access software, digital goods, or maintenance agreements
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in Washington?
In the state of Washington, the laws regarding tax on shipping and handling are very simple. If the item being shipped is taxable in itself, then the shipping charge is considered taxable.
If the item being shipped is not considered taxable, then the shipping charge is not taxable. If you are shipping multiples items, both taxable and nontaxable items, then you should have two shipping charges fairly divided between the taxable and nontaxable pieces of merchandise, based on the percentage of the charge that is applied to the taxable items. It must also be noted that any shipping and handling charges that are made after the buyer has received the receipt of the goods are exempt from taxes.
Are drop shipments subject to sales tax in Washington?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Washington, drop shipments are generally subject to state sales taxes. Any buyer is required to provide the either MTC exemption certificate, or SST exemption certificate
Section 2: Taxability of Various Items in Washington
This table shows the taxability of various goods and services in Washington. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||TAXABLE *|
|Food and Meals|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Utilities & Fuel||TAXABLE|
|Medical Goods and Services|
|Medical Devices||TAXABLE *|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||TAXABLE|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||EXEMPT|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Janitorial Services||EXEMPT *|
|Transportation Services||EXEMPT *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||EXEMPT|
|Custom Software - Downloaded||EXEMPT|
|Customization of Canned Software||EXEMPT|
|Digital Products||TAXABLE *|
|Vending Machine Sales|
* See notes in category taxability page for details
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