Syrup Tax Exemption

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What is syrup tax and when does it apply?

Syrup tax is an excise tax on wholesale sales of concentrated syrups that are used with carbonated water to produce a carbonated beverage.

Wholesalers generally collect the tax from retailers. However, if the wholesaler does not collect the tax, the retailer must report and pay the tax directly to the Department. This generally occurs in situations where the syrup is purchased from an out of state wholesaler who is not registered in Washington. The tax must be reported on the designated “syrup tax” line of the combined excise tax return. Reference: WAC 458-20-255

Retailers that pay syrup tax when buying carbonated beverage syrup to make carbonated fountain drinks can claim a business and occupation (B&O) tax credit. The B&O tax credit is now 100% of the syrup tax paid.

Requirements for the B&O Tax Credit:

  • Syrup must be used by the buyer in making carbonated drinks sold by the buyer
  • Credit must be claimed in the tax report period when the syrup was purchased
  • Unused credit may be carried forward to future reporting periods for a maximum of one year (12 months from the end of the tax reporting period when the credit was earned)
  • Credit may not exceed the B&O tax due
  • No refunds for credits

The credit must be itemized under the Credits section of the tax return when being claimed.

 

 

Rev. 12/14/14

 


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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