Sales and Use Taxes in Washington State
This page provides an overview of sales and use taxes for local governments in Washington State, including the various sales tax options available and examples of sales tax resolutions/ordinances.
For a more comprehensive discussion of the various sales tax options available to local governments, including implementation, administration, use of revenues, and revenue-sharing provisions, refer to MRSC’s City Revenue Guide and County Revenue Guide.
Retail sales taxes (chapter 82.08 RCW) and use taxes (chapter 82.12 RCW) are an important revenue source for many local governments in Washington – specifically cities, towns, counties, transit districts, and public facilities districts. (There are many other types of special purpose districts that do not have sales tax authority and must rely on other revenue sources such as property taxes or user fees and charges.)
For those local government entities with sales tax authority, sales taxes are typically the largest or second-largest source of revenue (the other usually being property taxes). For simplicity’s sake, we will refer to “retail sales and use” taxes as “sales taxes” unless otherwise noted.
Since 2008, Washington has used the destination-based sales tax system, also known as the “streamlined sales tax.” Under this system, the point of sale (the location where sales tax is calculated) is considered to be the point of delivery or where the buyer receives or takes possession of the merchandise (i.e. the destination).
In other words, the tax rate that is owed depends on the location of the sale/delivery, not the location of the business or shipping warehouse. For instance, if you buy a piece of furniture that is shipped from a warehouse in Auburn and have it delivered to Seattle, you will pay the local sales tax rate applicable in the City of Seattle. But if you take possession of merchandise at a retail business location in Auburn, you will pay the local sales tax rate applicable in the City of Auburn.
What Items are Taxable?
Sales taxes apply to most retail sales of “tangible personal property” within Washington, as defined in RCW 82.04.050. In addition, the Marketplace Fairness Act requires all “remote sellers” without a physical presence in the state (such as Internet or mail-order retailers) to collect and remit sales taxes on all purchases.
Services to individuals and businesses – things like haircuts, medical bills, consultant fees, etc. – are not “personal property,” and most services are not subject to sales tax. However, some services are subject to sales tax, as listed in RCW 82.04.050. For example, lodging and all other services provided by a hotel, motel, etc. are subject to the retail sales tax, as are physical fitness activities.
Local governments must pay and collect sales tax on all taxable purchases, just like any business or consumer, unless there is a specific exemption written into state law. See RCW 82.08.010(3), which defines “buyer,” “purchaser,” and “consumer” to include local government entities, and WAC 458-20-189 which discusses sales tax applicability to local governments and exemptions.
What is a Use Tax?
If a taxable purchase is made out-of-state by a Washington resident, business, or governmental entity for use in Washington, and the sales tax paid is less than the rate being levied within the local jurisdiction, state law requires that a “use tax” be calculated and paid to make up the difference (see chapter 82.12 RCW and WAC 458-20-178).
For example, if you buy furniture in Oregon (where there is no sales tax) and bring it back to Washington, and the sales tax rate in your city is 8.2%, you owe a use tax of 8.2% on the purchase price. Likewise, if you buy camera equipment in Idaho, where the sales tax rate is 6%, and your local sales tax rate is 8.2%, you owe a 2.2% use tax.
Practically speaking, few consumers pay a use tax, unless the purchase is of a car or truck where a use tax must be paid before the vehicle can be licensed. However, the implementation of the Marketplace Fairness Act in 2018, which required remote sellers to collect sales taxes on purchases delivered to Washington, should eliminate the vast majority of use tax noncompliance issues for Internet and catalog orders.
Businesses typically do pay use taxes because they are audited by the state Department of Revenue (DOR).
Similarly, local governments should be aware that DOR also audits local governments on a regular schedule to ensure that all use taxes are being paid. Failure to pay the appropriate use taxes can result in fines and interest due.
Sales and Use Tax Exemptions
There are a large number of specific sales tax exemptions listed in chapter 82.08 RCW. These exemptions change with some frequency as new exemptions are written and older ones expire or are repealed. Perhaps the most visible exemptions for consumers are prescription drugs (RCW 82.08.0281) and groceries (RCW 82.08.0293), although alcohol, restaurant meals, and prepared foods sold in grocery stores are taxable.
Sales tax exemptions that may be of particular interest to local governments include:
- Copies made in response to public records requests (RCW 82.08.02525);
- Sales from one political subdivision to another (or use of another jurisdiction's personal property) directly or indirectly due to annexations, mergers, incorporations, or contractual consolidations (see RCW 82.08.0278 and RCW 82.12.0274); and
- Labor and services on transportation projects (RCW 82.04.050(10) and WAC 458-20-171). (See our page Sales and Use Taxes in Public Works Contracts.)
For more information on exemptions, see DOR's page on Retail Sales and Use Tax Exemptions.
Nonresident Sales Tax Exemption
In addition, there is a limited sales tax exemption for residents of certain other states or Canadian provinces for goods they purchase to be used out-of-state, if those states or provinces either have no sales tax or if the sales tax is less than 3% (RCW 82.08.0273). The most notable examples are Alaska, Montana, and Oregon residents, who are eligible for this exemption because they do not have a sales tax. This exemption has an impact on border jurisdictions in particular.
However, this nonresident exemption was significantly changed during the 2019 legislative session. ESSB 5997 (effective July 1, 2019), now requires all sales to be taxed at the time of purchase rather than allowing for the exemption to be applied at the time of purchase. To receive a refund, the nonresident buyer must apply for a remittance with the state DOR. The refund only applies to the 6.5% state portion of the sales tax; there is no refund provided for any local sales taxes collected (which are described in more detail below).
To claim the exemption, the buyer must keep records of all their taxable purchases in Washington over the course of the calendar year. Once per year, the buyer may request a refund for sales taxes paid on all purchases made in Washington during the previous calendar year. The request must include appropriate documentation of all purchases along with proof of nonresidency.
The minimum refund that may be claimed is $25 – in other words, nonresidents must spend approximately $385 or more in Washington, before tax, during a single calendar year to be eligible for this refund. (Since only the 6.5% state portion of the sales tax is refunded, and 6.5% of $385 is just over $25.)
6.5% State Sales Tax
The State of Washington imposes a 6.5% sales tax on all retail sales as defined by statute (RCW 82.08.020). Cities, towns, counties, transit districts, and public facilities districts may impose additional local sales taxes as described below.
The state also provides for certain sales tax credits against the 6.5% state portion of the sales tax, which are remitted back to local government entities that meet the requirements of the specific tax credit. See the “Sales Tax Credits” section below for further explanation.
Unrestricted City and County Sales Taxes
Cities and counties can impose “unrestricted” sales taxes totaling a maximum of 1.0% on top of the 6.5% state sales tax. These revenues may be used for any lawful governmental purpose.
Below is a summary; for a more comprehensive discussion, including administration and revenue-sharing calculations, see MRSC’s City Revenue Guide and County Revenue Guide.
Basic/First Half Sales Tax
Any city, town, or county may impose a “basic” or “first half cent” sales tax of 0.5% (RCW 82.14.030(1)). These revenues are unrestricted and may be used for any lawful governmental purpose. All cities and counties in Washington have imposed this tax.
The revenues within incorporated areas are shared between the cities and the counties, with 85% distributed to the city and 15% to the county. The total combined (city plus county) rate may not exceed 0.5%, so the statute provides mechanisms for credits and revenue sharing to make sure this limit is not exceeded.
Optional/Second Half Sales Tax
In addition to the “basic” or “first half” sales tax, any city, town, or county may impose an “optional” or “second half cent” sales tax of up to 0.5% (RCW 82.14.030(2)). These revenues are also unrestricted and may be used for any lawful governmental purpose.
The total combined (city plus county) rate may not exceed 0.5%, and just like the “first half” the statute provides mechanisms for credits and revenue sharing to make sure the limit is not exceeded. Almost all cities and counties in Washington have imposed the second half sales tax at the full rate of 0.5%. If both the city and the county have imposed the second half at the same rate, the revenue from the incorporated areas is shared between the city and county just like the first half (85% to the city and 15% to the county).
This tax may be imposed by the legislative body and does not require voter approval. However, changes to the tax rate are subject to possible referendum even if the city or county does not have powers of initiative and referendum (RCW 82.14.036).
If a city or county has imposed both the 0.5% “basic” sales tax and the 0.5% “optional” sales tax, the total combined (basic plus optional) sales tax rate will be 1.0%.
Restricted Local Sales Taxes
Cities, counties, transit districts, and public facilities districts can impose a number of “restricted” local sales taxes on top of the 6.5% state sales tax and the local “first half” and “second half” taxes. These restricted revenues may only be used for the specific purposes listed in state statute. For any sales taxes requiring voter approval, the revenues must be spent in accordance with the purposes stated in the ballot measure.
Below is a summary of these various restricted sales taxes. For more a more comprehensive discussion of these revenue sources, including administration, revenue-sharing calculations, and ballot measure requirements, see MRSC’s City Revenue Guide and County Revenue Guide.
Affordable Housing Sales Tax
Counties, cities, and towns. Any county may impose a sales tax up to 0.1% for affordable housing, and any city or town may impose this sales tax if the county has not done so (RCW 82.14.530). For more information, see our page Affordable Housing Funding Sources.
Criminal Justice Sales Tax
Counties only, but revenues are shared with cities and towns. Any county may impose a 0.1% sales tax for criminal justice purposes (RCW 82.14.340). Cities do not have the authority to impose this tax, but the revenues must be shared with the cities within the county on a per capita (population) basis. The measure may be imposed by the legislative body and does not require voter approval. Most counties have already imposed this sales tax.
Cultural Access Program Sales Tax
Cities, towns, and counties. Any city, town, or county may impose a sales tax up to 0.1% and up to 7 years to benefit or expand access to nonprofit cultural organizations (RCW 82.14.525 and chapter 36.160 RCW). The measure requires voter approval.
The requirements for this sales tax are quite detailed. While the statutory language is not entirely clear, it is our interpretation that a county and a city located within that county may not impose this sales tax at the same time.
As an alternative, any city, town, or county (except King County) may impose a roughly equivalent property tax under RCW 84.52.821. The property tax and sales tax options are mutually exclusive and may not be imposed concurrently by the same jurisdiction.
- Olympia Resolution No. M-2280 (2021) – Submitting 7-year, 0.1% cultural access program sales tax to voters for funding arts, science, cultural, and heritage programs
- Tacoma Resolution No. 40046 (2018) – Submitting 7-year, 0.1% cultural access program sales tax to voters for youth programs and arts, science, culture, and heritage activities.
Emergency Communications (E-911) Sales Tax
Counties only. Any county may impose a sales tax up to 0.2% for emergency communications (enhanced 911 or E-911) systems and facilities (RCW 82.14.420). Previously, the maximum rate was 0.1%, but in 2019 this increased to 0.2%. The measure requires voter approval; any county that previously imposed a 0.1% sales tax under this authority and wishes to increase its tax rate above 0.1% must submit a proposition to voters to do so.
- Cowlitz County Resolution No. 16 082 (2016) – Submitting 0.1% E-911 sales tax to voters
- Snohomish County Ordinance No. 18-037 (2018) – Submitting 0.1% E-911 sales tax to voters
- Thurston County Ordinance No. 15802 (2019) – Submitting ballot measure to increase E-911 sales tax from 0.1% to 0.2%
Juvenile Detention Facilities & Jails Sales Tax
Counties only. Any county with a population of less than 1 million may impose a 0.1% sales tax for juvenile detention facilities and jails, with voter approval (RCW 82.14.350). While the statutory language is somewhat unclear, it is our conclusion that these revenues may be used for adult jails as well as juvenile detention facilities.
- Clallam County Resolution No. 69-2017 (2017) – Submitting juvenile detention facility & jails sales tax to voters for equipping, repairing, maintaining, and/or operating the county juvenile and family services facility.
Mental Health & Chemical Dependency Sales Tax
Counties only, plus Tacoma. Any county may impose a mental health and chemical dependency sales tax up to 0.1% for mental health and drug treatment purposes (RCW 82.14.460). Some jurisdictions may refer to this sales tax with other names, such as the mental illness and drug dependency (MIDD) sales tax or the treatment sales tax.
This tax may be imposed by the county legislative body and does not require voter approval. In addition, the statute authorizes any city over 30,000 population, located within a county over 800,000 population (King, Pierce, or Snohomish counties), to impose this sales tax if the county has not done so first. Tacoma has enacted this sales tax, but all three of those counties have now enacted this sales tax at a county level so no other cities are eligible anymore.
- Kitsap County Ordinance No. 507-2013 (2013) – Imposing 0.1% mental health and chemical dependency sales tax
- Pacific County Ordinance No. 175 (2015) – Imposing 0.1% mental health and chemical dependency sales tax
Public Facilities District (PFD) Sales Tax
Public facilities districts only. Public facilities districts created under chapter 36.100 RCW or chapter 35.57 RCW may impose a sales tax up to 0.2% to support their public facilities (RCW 82.14.048). The measure requires voter approval. There is also an additional 0.2% sales tax authority for “distressed PFDs” under the same section which currently applies only to the City of Wenatchee.
- Asotin County Public Facilities District Resolution No. 13-01 (2013) – Submitting 0.2% PFD sales tax to voters for maintenance and operation of existing aquatic center
- Pasco Public Facilities District Resolution No. 2022-02 (2022) – Submitting 0.2% PFD sales tax to voters for construction and maintenance of new aquatic facility and competition pool
Public Safety Sales Tax
Cities, towns, and counties. Any city or county may impose a public safety sales tax (RCW 82.14.450), with at least one-third of the revenues used solely for criminal justice purposes (as defined in RCW 82.14.340), fire protection purposes, or both. The maximum rate is 0.3% for counties and 0.1% for cities, and the revenue must be shared between cities and counties. However, the combined city/county rate may not exceed 0.3%.
The measure requires voter approval, and unlike most local revenue options it may only be submitted at a primary or general election and may not be submitted at a February or April special election. Another unique feature is that motor vehicle sales and the first 36 months of a motor vehicle lease are exempt from this portion of the sales tax.
- Kittitas County Resolution No. 2013-064 (2013) – Submitting continuation of existing 0.3% public safety sales tax to voters for various criminal justice services and personnel. Expires after 7 years and may not supplant existing criminal justice funding or be used for construction/operation of jail/courthouse. Note: Public safety sales taxes may be imposed indefinitely. However, a few jurisdictions have voluntarily imposed sunset clauses requiring periodic voter re-approval.
- Kirkland Resolution No. R-5324 (2018) – Submitting 0.1% public safety sales tax to voters for additional police and school resource officers, after-school programs, mental health, gun safety, homelessness, domestic violence, suicide prevention, and other public safety measures.
- Skagit County Resolution No. R20130102 (2013) – Submitting 0.3% public safety sales tax to voters to construct, maintain, and operate a new jail facility for county and city inmates.
Rental Car Sales Tax
Counties only. Any county may impose a 1.0% sales tax upon taxable retail car rentals to fund public sports facilities and activities (RCW 82.14.049). This tax does not require voter approval. The proceeds may may be used for eligible public sports stadium facilities and youth or amateur sports but may not be used to subsidize any professional sports team.
King County (RCW 82.14.360(2)-(6), for a professional baseball stadium) and Sound Transit (RCW 81.104.160(2), for high-capacity transit) have separate rental car taxing authority.
- Kittitas County Ordinance No. 2013-10 (2013) – Imposing rental car sales tax under RCW 82.14.049
Transit Sales Taxes
Transit agencies only. Public transit agencies may impose a sales tax up to 0.9% for public transportation purposes, with voter approval (RCW 82.14.045). This tax is typically imposed by public transportation benefit areas (PTBAs) and other transit districts, as very few cities or counties provide their own transit service directly.
Some individual transit districts have higher maximum rates, and Kitsap Transit has additional sales tax authority up to 0.4% for passenger-only ferry service RCW 82.14.440).
Eligible transit districts may also impose an additional sales tax up to 1.0% for the purpose of providing high-capacity transit service operating principally on exclusive rights-of-way (RCW 81.104.170). This measure also requires voter approval, and currently Sound Transit is the only agency that has imposed the high-capacity transit sales tax.
- Spokane Transit Authority Resolution No. 742-16 (2016) – Submitting transit sales tax increase of 0.2% to voters (increasing total sales tax rate to 0.8%), with phased implementation and expiring within approximately 10 years
Transportation Benefit District Sales Tax
Cities, towns, and counties. Any city or county may form a transportation benefit district (TBD) to generate revenue for specific transportation projects. One of the most common funding sources is a voted sales tax up to 10 years and 0.2%. For more information and examples, see our Transportation Benefit Districts page.
Zoo & Aquarium Sales Tax
Pierce County only. Pierce County has imposed 0.1% sales tax for zoos, aquariums, and wildlife facilities (RCW 82.14.400). Pierce County is the only agency with such authority, and the revenue is shared between the county and its cities and towns.
Sales Tax Credits
State statutes also authorize local governments to impose certain sales tax “credits” against the 6.5% state sales tax to generate revenue. With a sales tax credit, the state credits a portion of its sales tax revenues to the local jurisdiction, but the total sales tax rate paid by the consumer remains unchanged. These sales tax credits are typically restricted to specific jurisdictions and often expire after a certain number of years.
The most common sales tax credit is the “basic” or “state shared” lodging tax up to 2% under RCW 67.28.180 and .1801. (See our Lodging Tax page for more information).
Other examples of state sales tax credits include:
- HB 1406 affordable housing sales tax credit (RCW 82.14.540); for more information see our page Affordable Housing Funding Sources
- Annexation services (RCW 82.14.415)
- Local infrastructure financing tool (LIFT – RCW 82.14.575)
- Rural counties public facilities (RCW 82.14.370)
Local Sales Tax Rates and Distributions
Local sales tax rates can vary significantly depending on which jurisdictions have imposed which local sales tax options. To see which local governments in Washington have imposed which sales taxes and at what rates (percentages), see our Tax and Population Data page.
You can also look up sales and use tax rates for a specific location using DOR's Sales and Use Tax Rates webpage.
Sales tax revenues (dollar amounts) are impacted not only by the local sales tax rates, but also by the nature of the local economy and the quantity of taxable retail sales within a jurisdiction. The Tax and Population Data page also contains a separate spreadsheet with information on total sales tax revenues for the unrestricted “basic” and “optional” sales taxes under RCW 82.14.030(1) and (2). For other sales tax distributions, see DOR's Local Sales and Use Tax Distribution page.
Timing of Sales Tax Receipts and Rate Changes
For most purchases, there is somewhere between a 60-day to 90-day time lag between collection (the actual retail sale) and local government receipt of the sales tax revenue from that sale. This is because most retailers remit sales taxes to DOR on a monthly basis, with payment due by the 25th of the following month (RCW 82.32.045 and WAC 458-20-22801). DOR then distributes those collections (plus interest and minus any administrative fees) to the local jurisdiction on the last business day of the following month.
For instance, if a sale is made in January – regardless of whether the sale took place on January 1 or January 31 – the sales tax is typically remitted to DOR by February 25, and DOR would then distribute the local portion of the sales tax to the local agency around March 31.
Sales tax rate changes may only take effect on January 1, April 1, or July 1, and no sooner than 75 calendar days after DOR receives notice of the change (RCW 82.14.055). However, credits against the state sales tax rate that do not result in an increase to the consumer may take place on the first day of any month, and no sooner than 30 calendar days after DOR receives notice.
Sales Tax Ballot Measure Results
To see how voted sales tax measures have fared in recent years, see MRSC's Local Ballot Measure Database. You can filter the results based on type of jurisdiction (city, county, public facilities district, or type of transit authority) and/or based on the funding type/statutory authority (such as affordable housing sales tax, emergency communications sales tax, transit sales tax, etc.).
Below are some helpful resources from the state Department of Revenue regarding sales and use taxes:
- Sales and Use Tax Rates – Provides various options for looking up the sales tax rates in a particular location (including mobile app), listings of upcoming tax rate changes, tax calculation charts, and information about how to determine the location of a sale
- Local Sales and Use Tax Distribution – Custom reports for sales tax distributions by revenue type and jurisdiction
- Retail Sales and Use Tax Exemptions – List of sales tax exemptions and applicable statutory citations
- Retail Sales for Cities and Counties – Shows taxable retail sales for each city and county by calendar year