Washington sales tax is a destination-based state tax that applies to most retail and wholesale transactions. Sales tax rates vary by county. A business must register to collect and remit sales tax in Washington if it has nexus in the state. Nexus is defined as a commercial connection that obligates a business to collect and remit sales taxes. Examples of nexus include having an office, warehouse, or distribution center in the state; employees, contractors, or agents working in the state; a physical presence such as a retail store, rental property, or storage facility; or click-through nexus (when businesses agree to reward a person located in the state for making purchases through a link or website).
- Washington’s sales tax rate is 6.5% on most taxable goods and services.
- Local Sales Tax: On top of the state rate, there may be additional local sales taxes depending on the location of the sale. These can range from 0% to 4.10%, bringing the total combined rate up to 10.4% in some areas.
Once a business has registered and begun collecting sales tax, it must file returns and remit collected tax by a specified due date. Late filings can result in penalties and interest charges.
Washington Reseller Permit
A Washington Reseller Permit allows you to purchase merchandise at wholesale without paying sales tax, as long as you intend to resell it later. It is free to apply for and lasts for four years. You need a Washington Reseller Permit if you:
- Are a business registered with Washington’s Department of Revenue (DOR).
- Purchase tangible personal property for resale (not for your own use).
- Want to avoid paying sales tax on those purchases.
How to Get a Washington Reseller Permit?
There are three main ways to apply for a Washington Reseller Permit:
Online: through the DOR’s Secure Access Washington (SAW) system: <invalid URL removed>: <invalid URL removed>
By mail: Download and complete the Reseller Permit application form (https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits/apply-print-or-appeal-your-reseller-permit) and mail it to the DOR address listed on the form.
By fax: Fax the completed application form to the DOR.
Washington Sales Tax Exemption
There are a variety of exemptions to Washington Sales Tax, falling into two main categories:
Exempt Goods and Services:
Groceries: Most unprepared food items, including fruits, vegetables, dairy products, bread, meat, and baked goods. However, prepared foods, restaurant meals, and alcoholic beverages are generally taxable.
Prescription drugs: Prescription medications and insulin.
Services: Some services, such as personal and professional services (barbering, haircuts, landscaping, pest control, etc.), are exempt.
Agricultural products: Products sold directly from a farm or farmer’s market, including fruits, vegetables, meat, eggs, and honey.
Machinery and equipment: Used by manufacturers, farmers, and research and development facilities under certain conditions.
Religious and educational organizations: Purchases made by these organizations for their non-profit activities may be exempt.
Government agencies: Federal, state, and local government purchases are generally exempt.
Non-profit organizations: Qualified non-profit organizations registered with the IRS may be exempt on purchases for their charitable activities.
Out-of-state buyers: Sales tax is not due on purchases made by out-of-state buyers who remove the item from the state within 60 days.