Retail Sales and Use Tax

• As of 2011, the state retail sales and use tax in Washington is 6.5 percent. Retail sales tax is charged at the time of purchase or payment for service, and the seller must forward the tax to the Washington Department of Revenue. The use tax must be paid by the purchaser or consumer when the sales tax was uncollected by the service provider or seller, as in the case of items purchased from out-of-state over the Internet or by mail order and delivered to a Washington address.
  
  

Taxable Items

• Any tangible property sold in Washington is subject to retail sales tax. The tax is levied on a variety of services, including repairs, cleaning, constructing, installation, improving or decorating. Services such as maintenance, lawn care, sporting and physical fitness activities, recreation, real or personal property and amusement and entertainment must all charge sales tax. Depending on the jurisdiction, hotels, motels and other lodging accommodations, such as recreational vehicle parks, also charge sales tax.
  
  

Tax-Exempt Items

• Among the items not subject to retail sales or use tax in Washington are prescription medication, newspapers and food purchased at grocery stores for at-home consumption. Items or services sold to agencies of the federal government or Indian tribal governments are exempt from sales tax, as are interstate and foreign sales. Most equipment or machinery used for manufacturing is tax-exempt. While sales to non-state residents are exempt, sales to any Washington residents is subject to tax.
  
  

Determining Sale Location

• According to the Washington Department of Revenue, "Sales tax collection is based on the location where the customer receives the merchandise or service." This means that in order for local tax jurisdiction to receive the correct amount of tax money, all retail sales must be accurately coded. By statute, sales of goods and merchandise are coded by the location of customer receipt. Items purchased over the counter are coded to the store where the purchase took place. Those items delivered to the customer are coded to the location of customer receipt. Services and labor are coded to the place of performance.