Paying Sales Tax

Paying Sales Tax

Restaurants are considered consumers when purchasing goods or retail services for its own use and must pay retail sales or use tax when purchasing the following:

  • Chairs, tables and other furnishings
  • Dishes, silverware and plastic trays
  • Guest checks
  • Janitorial supplies
  • Pest control
  • Special cleaning services (hoods, vents, etc.)
  • Vending machines (purchases or rentals)
  • Matches
  • Equipment (ovens, grills, coffee makers, )
  • Repair parts and labor
  • Tap cleaning
Nontaxable – Goods for resale

A restaurant may use a reseller permit to purchase the following tax-exempt:

  • Inventory/meal ingredients
  • Soft drinks
  • Disposable eating utensils and food containers (These are resold with the food product)
  • Liquor, beer and wine
Use tax applies when sales tax is not paid

Generally, when you purchase taxable goods or services in Washington state, the seller will collect retail sales tax. However, there are many instances where a seller will not collect Washington’s retail sales tax.

The most common circumstances where use tax will apply include:

  • Goods are purchased from someone who is not authorized to collect sales tax such as an unregistered individual.
  • Goods are purchased from an out of state retailer (Internet or mail order).
  • Goods are purchased for resale but are consumed instead of
  • Goods are purchased in a state with no sales tax or a lower sales tax
  • Personal property is acquired with the purchase of real

To report use tax, total your taxable purchases and list the amount on the use tax lines (state and local) of the excise tax return. Maintain documentation that use tax was paid.

Note: Sales tax applies to the selling price whereas use tax applies to the value. The local use tax rate is determined by the location where the goods are used.

References: RCW 82.08.020, RCW 82.12.020, WAC 458-20-178



Rev. 1/3/17

This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

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Categories: HERO