Collecting and reporting sales tax

Reporting retail sales tax on the Excise Tax Return

Items sold at retail are reported on the retailing and the retail sales tax lines of the excise tax return. The gross amount of the sale, not including sales tax, is reported on the return.

The gross amount reported under the retailing and retail sales tax lines must be the same. The deduction amount may differ.

Determining your local sales tax rate

People making retail sales must collect the local portion of the sales tax along with the state portion. Local tax is reported on the excise tax return and must be coded according to where the retail sale is made. The sales tax coding on the tax return determines how we distribute local taxes to governments around the state. Because local governments depend upon these taxes to fund various services, it is important to collect and report sales tax properly.

When selling goods or merchandise, the location for local tax purposes is the retail outlet from which delivery is made. For convenience stores and gas stations, local tax is based on the location of the store or station where an item is sold.

Other local taxes to consider: The Regional Transit Authority (RTA): A 0.9 percent tax that is collected in addition to state and local retail sales tax on sales made in portions of King, Pierce, and Snohomish Counties.

To verify your location code and sales tax rate, use our online Tax Rate Lookup Tool.

References: RCW 82.04.290 and 82.08.0293; WAC 458-20- 124, 458-20-244, and 458-20-145

When NOT to collect retail sales tax from customers

Prepackaged food products: Generally, food products that are sealed, canned, boxed, bottled or otherwise packed and sealed by someone other than the retailer are exempt from sales tax. Examples include canned vegetables and fruit, potatoes chips, eggs, packaged ice cream, etc.

Sales of prepackaged food products are reported under the retailing and retail sales tax lines on the excise tax return. A deduction from retail sales tax is itemized on the deduction detail page (0122 – Exempt Food Sales).

See convenience stores whose prepared food sales are more than 75 percent of their total food sales under "Collecting Retail Sales Tax from Customers."

Bakery items: Sales of bakery items are not subject to retail sales tax unless a bakery item is sold with a utensil.

Newspapers: A newspaper is a publication of general circulation bearing a title, issued at regularly stated intervals of at least once every two weeks, and formed of printed paper sheets without substantial binding. It must be of general interest, containing information on current events. A deduction from retail sales tax is itemized on the deduction detail page (0125 – Newspapers).

Money orders: Report the fee received from such sales on the excise tax return under the Service & Other Activities B&O tax classification.

Postage stamps: Any fee received for the sale of postage stamps is reported on the excise tax return under the Service & Other Activities B&O tax classification.