SALT Report 1429 – The Washington Department of Revenue issued a notice regarding the taxation of spirits sales by distributors. Effective March 1, 2012, spirits distributors may begin selling spirits in Washington to on-premises licensees, off-premises licensees, and other distributors.
Distributors are required to collect and remit spirits sales tax of 13.7% of the gross selling price and spirits liter tax of $2.4408 per liter on all sales of spirits in their original container to on-premises licensees. Sales of spirits to off-premises licensees and other distributors are not subject to the spirits sales tax or spirits liter tax.
The gross income received from the sale of spirits to on-premise licensees, off-premise licensees, and other distributors is subject to business and occupation (B&O) tax under the wholesaling classification. The general retail sales tax does not apply to sales of spirits in their original container.
When making spirits sales, distributors must be able to document that the proper spirits taxes have been collected. The Department has provided a fact sheet detailing the documentation requirements.
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