SALT Report 1572 – The Washington State Department of Revenue issued a business guide regarding the taxability of collection and disposal services for the solid waste, recycling, and salvage industries. This guide will help businesses understand how state taxes apply to these activities.
Determining Whether a Pick-up is Solid Waste, Recycling, or Salvage
If the materials are taken to a landfill, transfer station, or other facility for disposal, the materials are considered “solid waste” regardless of whether the materials could be recycled. Any materials taken for disposal are subject to the solid waste collection tax. The tax is charged to the resident or business whose materials are hauled away and collected by the company that provides the service.
What is the Solid Waste Collection Tax?
It is a 3.6% tax applied to the fees charged for the collection, transfer, storage, or disposal of solid waste.
Who is Exempt from the Solid Waste Collection Tax?
- The federal government and its agencies
- Indian tribes and tribal members for services provided in Indian country, and
How is Income from Solid Waste Collection Services Taxed?
Service and other B&O tax is applied to the gross income received from solid waste collection services, late charges, or fees.
Retailing B&O tax is due on charges for waste containers, bins, and dumpsters, separately stated from charges for actual waste collection services. Retail sales tax must also be collected on these charges unless the sale is exempt.
At this time, the Department does not have a specific exemption certificate for disposal and recycling services, however an example is provided in the guide.
For Further Information:
Washington Department of Revenue – Business Guides