Sales, Use and International Tax Activity Update - May 2010

H20-No and Other Not So “Sweet” News in Washington

Beginning June 1, 2010 through June 30, 2013, bottled water is taxable.

An exemption is allowed for sales of bottled water dispensed to patients pursuant to a prescription. Except for sales of bottled water delivered to the buyer in a reusable container not sold with the water, the seller must collect tax on sales subject to this exemption. However, a buyer that pays at least $25 in state and local sales taxes on purchases of bottled water subject to this exemption may apply for a tax refund.

An exemption is also available for sales of bottled water to those with no available source of potable water. However, sellers must collect the tax unless the bottled water is delivered to the buyer in a reusable container that is not sold with the water. The buyer may apply for a tax refund if at least $25 in local and state sales taxes has been paid on sales subject to this exemption.

Beginning June 1, 2010, the sales tax exemption for candy is repealed.

Beginning July 1, 2010, a temporary excise tax is imposed on the wholesale or retail sale of carbonated beverages. The tax will be imposed at a rate of 2 cents per 12 ounces and will terminate after three years. The tax does not apply to any successive sale of previously taxed carbonated beverages.

These law changes can be viewed on the Washington Department of Revenue Website.

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