Wholesale sales of fish

Your income from sales of fish to resellers in Washington is subject to business and occupation (B&O) tax under the Wholesaling classification when the buyer provides a valid reseller permit. You do not have to collect retail sales tax on wholesale sales.

You must keep copies of reseller permits for five years.

Retail sales of fish

Your income from sales of fish to Washington consumers is subject to B&O tax under the Retailing classification. You do not have to collect sales tax on fish sold for human consumption. You must report the gross amount of such sales as Retail Sales and then take an Exempt Food Sales deduction.

Fish sold for purposes other than human consumption, such as pet food or bait, is not considered exempt food or food ingredients. This means you must collect sales tax unless the buyer provides a valid exemption certificate.

Interstate sales of fish

Fish delivered to buyers outside of Washington is exempt from B&O and retail sales tax. You must include such sales in the gross amounts reported and then take an Interstate and Foreign Sales deduction from the applicable classifications.

Enhanced food fish tax

In addition to B&O tax, commercial fish buyers and sellers may be liable for the enhanced food fish tax. This tax applies to the value of the fish when first landed. This tax also applies to byproducts and parts of seafood.

For more information, please see the Enhanced food fish tax section of this guide.

Litter tax

You must report Litter tax on both wholesale and retail sales of fish that is for human or pet consumption.

Definitions

Commercial deep sea fishing means fishing done for profit outside the territorial waters of the state of Washington. It does not include sport fishing or the operation of charter boats for sport fishing. The phrase also does not apply to fishing methods that can only be legally performed in Washington waters: kelping, purse seining, or gill netting.

Extracting

Income from catching fish in Washington waters (within the three-mile limit) is subject to business and occupation (B&O) tax under the Extracting classification. The taxable amount is based on the value of the fish, which is usually the selling price. Persons performing extracting activities for other extractors are subject to the Extracting for Hire B&O tax upon their gross income from those services.

Wholesale sales of fish

Your income from sales of fish to resellers in Washington is subject to B&O tax under the Wholesaling classification when the buyer provides a valid reseller permit. You do not have to collect retail sales tax on wholesale sales.

You must keep copies of reseller permits for five years.

Retail sales of fish

Your income from sales of fish to Washington consumers is subject to B&O tax under the Retailing classification. You do not have to collect sales tax on fish sold for human consumption. You must report the gross amount of such sales as Retail Sales and then take an Exempt Food Sales deduction.

Fish sold for purposes other than human consumption, such as pet food or bait, is not considered exempt food or food ingredients. This means you must collect sales tax unless the buyer provides a valid exemption certificate.

Interstate sales of fish

Fish delivered to buyers outside of Washington is exempt from B&O and retail sales tax. You must include such sales in the gross amounts reported and then take an Interstate and Foreign Sales deduction from the applicable classifications.

Multiple Activities Tax Credit (MATC)

If you catch and sell fish within Washington, you must report under both the Extracting B&O tax and either the Wholesaling or Retailing B&O tax. However, you may then claim a Multiple Activities Tax Credit (MATC) so that you only pay tax once.

You may not claim an MATC for fish that is either caught or sold outside of Washington.

Enhanced food fish tax

In addition to B&O tax, commercial fish buyers and sellers may be liable for the enhanced food fish tax. This tax applies to the value of the fish when first landed. This tax also applies to byproducts and parts of seafood.

For more information, please see the Enhanced food fish tax section of this guide.

Litter tax

You must report Litter tax on both wholesale and retail sales of fish that is for human or pet consumption.

Generally, commercial fishing operations must pay retail sales or use tax on purchases of watercraft, component parts, and repairs. Use tax applies when sales tax was not paid at the time of purchase.

Commercial deep sea fishing vessels

Retail sales tax and use tax do not apply to sales of the following when primarily used in conducting commercial deep sea fishing operations:

• Watercraft.
• Component parts of watercraft.
• Labor and services for constructing, repairing, cleaning, altering, or improving the watercraft.

To qualify for the exemption, the buyer must give the seller a properly completed Buyer’s Retail Sales Tax Exemption Certificate.

This exemption does not apply to rentals of such vessels.

Definitions

Component part includes tangible personal property that is attached to or part of the watercraft. Component part does not include consumable supplies, equipment, or furnishings of any kind that are not attached to the watercraft.

Commercial deep sea fishing means fishing done for profit outside the territorial waters of the state of Washington. It does not include sport fishing or the operation of charter boats for sport fishing. The phrase also does not apply to fishing methods that can only be legally performed in Washington waters: kelping, purse seining, or gill netting.

Watercraft means every type of floating equipment that is designed for carrying fishing gear, fish catch, or fishing crews.

Commercial passenger fishing generally refers to sport fishing (i.e., guided or charter fishing). Generally, gross income from sport fishing trips is subject to business and occupation (B&O) tax under the Retailing classification, and retail sales tax applies.

For more information, please see our Fishing charters guide.

The enhanced food fish tax (EFFT) is an excise tax on the first commercial possessor of certain fish within Washington. The tax is based on the value of the fish when first landed. This tax also applies to byproducts and parts of seafood.

The fish tax is usually paid by the dealer who buys the fish, and not the commercial fisher. However, if the buyer is someone other than a Department of Fish and Wildlife licensed dealer, the commercial fisher is directly responsible for the tax. A dealer, licensed or unlicensed, may deduct an amount equal to half of the fish tax from the price they pay to the fisher.

For more information, please see our enhanced food fish tax webpage.

In Washington state, certain federally recognized tribes and their members have tribal fishing, hunting, and gathering rights. Gross income directly derived from activities related to treaty fishing rights is not subject to state tax.

For information, please see our publication on Tribal fishing, hunting, and gathering and our Indian tax guide. For specific inquiries, you may contact our tribal liaison at (360) 534-1586.

Everyone who uses personal property in a business must complete a personal property tax listing form. This listing must be filed with your county assessor’s office by April 30 of each year. Examples of personal property used in conducting business include, but are not limited to:

• Machinery and equipment.
• Computer hardware and software.
• Furniture and fixtures.
• Supplies.

Commercial vessel tax

Vessels used exclusively for commercial fishing activities are subject to the Commercial Vessel Tax, which is a personal property tax. You must list your vessel with the Department of Revenue by filling out and submitting a Commercial Vessel Tax Personal Property Listing Application.

For more information, please see our Personal Property Tax brochure, our How my business property is valued web page, and our publication on the Commercial Vessel Tax.

Consumables are goods purchased for use during the normal course of business. Commercial fishers must pay retail sales or use tax on all equipment and supplies unless a specific exemption applies. This includes but is not limited to, bait, bedding, table and kitchen wares, fishing nets, hooks, lines, floats, hand tools, ice, fuel, and lubricants. 

Use tax applies when retail sales tax was not paid at the time of purchase. 

Diesel fuel used in commercial fishing

If you are regularly engaged in commercial deep sea fishing operations, you are eligible for a sales and use tax exemption for diesel fuel used in the operation of watercraft. You are not "regularly engaged" in commercial fishing operations if you earn less than $5,000 per year from this activity. If you engage in commercial deep-sea fishing and also charter boats for sport fishing outside the territorial waters of the state, you may combine your income from both activities in order to meet the $5,000 threshold.

To qualify for this exemption, you must give the seller a completed Buyer’s Retail Sales Tax Exemption Certificate.

Individual fishing quotas (IFQs) are a type of “catch share” regulated by the U.S. Government. They are permits to harvest specific quantities of fish or shellfish. 

IFQ permits held for exclusive use by a person are intangible rights. There are two different business and occupation (B&O) tax treatments for IFQs depending on whether they are leased or sold.

Lease of IFQs

A lease merely grants the lessee the right to fish and retain a specific share of the total allowable catches. It is not a sale of fish and does not guarantee a specific quantify of fish will be harvested. 

The gross amount received for a lease of an IFQ is subject to B&O tax under the Royalties classification and is considered apportionable income. 

Royalty income from the lease of the IFQ is attributed to the state where the IFQ is used by the lessee to harvest fish or shellfish. For an IFQ that allows fishing both in and outside of Washington, the lessor may use a reasonable proportional method to attribute income.

Sale of IFQs

Income from the outright sale of an IFQ is subject to B&O tax under the Service and Other Activities classification and is considered apportionable income.

Income from the sale of an IFQ is attributed to the state where the IFQ benefits the owner (i.e., allows them to harvest fish or shellfish). For an IFQ that allows fishing both in and outside of Washington, the seller may use a reasonable proportional method to attribute income.

Note: Attribution is merely the first step in calculating the taxable amount of apportionable income. 
 

Boats used part-time for commercial fishing activities are subject to the Watercraft Excise Tax. The Watercraft Excise Tax is administered by the Department of Licensing. If you have questions about the watercraft excise tax, you may call the Department of Licensing's Vehicle Vessel Division at 360-902-3770. You can also contact your local licensing agent or write to:

Note: Vessels used exclusively for commercial fishing activities are subject to the Commercial Vessel tax. Please see the personal property tax section of this guide for more information.