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Manufacturing seafood products that remain in a raw, raw frozen, or raw salted state

Manufacturing

Businesses that manufacture or process for hire seafood products must report gross income from this activity under the Manufacturing Seafood Products business and occupation (B&O) tax classification. They may then take a deduction for the full amount under the *Exempt Manufactured Products classification.

Note: This deduction expires July 1, 2035. The activity will then be subject to a reduced B&O tax rate.

Selling

Manufacturers of seafood products must also report their sales under either the Wholesaling or Retailing B&O tax classification. However, they may then take a B&O tax deduction for the following sales of seafood products they manufacture:

Note: This deduction expires July 1, 2035. The activity will then be subject to a reduced B&O tax rate.

Retail sales of seafood products must also be reported under the Retail Sales tax classification. However, seafood products are generally exempt from sales tax in Washington and can be deducted as Exempt Food Sales.

Sales of seafood products delivered to consumers outside of Washington may be deducted from the Retailing B&O and Retail Sales tax classifications as Interstate and Foreign Sales.

Multiple Activities Tax Credit (MATC)

When a business performs more than one taxable activity for the same product, it reports each activity under the proper classifications but then takes the MATC so that B&O tax is only paid once.

For more information, please see the MATC section of this guide.

Litter tax

Manufacturers of seafood products must report Litter tax on products manufactured or sold (wholesale and retail) in Washington.

Reporting/documentation requirements

Businesses that claim the starred (*) deductions must file an Annual Tax Performance Report by May 31 of each year following a year when they claim the deduction. This requirement will also apply to the reduced B&O tax rates that take effect after the deductions expire.

Businesses that make wholesale sales of seafood products to customers who will take the products out of state must keep documentation to support this deduction. Generally, a letter from the customer stating their intent is enough.

Additional resources

Food manufacturing industry incentives

References