Washington – Preferential Tax Rate for Warehousing and Reselling Prescription Drugs

SALT Report 3031 – The Washington Department of Revenue issued an excise tax advisory to clarify the requirements that must be met to qualify for the preferential B&O tax treatment for warehousing and reselling prescription drugs.  Under the provisions of RCW 82.04.272, a preferential B&O tax rate of 0.138% is available to persons “engaging in the business of warehousing and reselling drugs for human use pursuant to a prescription.”

To qualify for the preferential rate, the seller must meet all of the following conditions:

  • Purchase prescription drugs from a manufacturer or wholesaler,
  • Warehouse and resell the prescription drugs.  The warehousing is not required to occur in Washington,
  • Be registered with the federal Drug Enforcement Administration, and
  • Be licensed by the Pharmacy Quality Assurance Commission as either a wholesaler or a retailer

Qualified sales must be made to a buyer that is either:

  • A retailer with a pharmacy facility license or nonresidential pharmacy license issued by the Department of Health, or
  • A hospital, clinic, health care provider, or other provider of health care services

SALT Report 2998 previously reported the Department’s intention to adopt these provisions.

For Further Information

Washington Department of Revenue – Excise Tax Advisory No. 3180.2013


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