The State of Washington Is Getting Trashy with Sellers About Litter Tax
We’ve received a number of calls recently from sellers who have been contacted by the state of Washington for failing to register and pay the litter tax. The rate is only .00015 or .015 percent, but it can add up over time, especially for large sellers. However, the sellers I have spoken with are more upset over the headaches of having to deal with another tax rather than the amount of money that Washington was looking for, especially since every seller I have been contacted by is a remote seller.
What is the Litter Tax
The litter tax (WAC 458-20-243) applies to thirteen categories of products and is imposed on manufacturers, wholesalers, and retailers. The litter tax is paid on the excise tax return, which is the same return used to pay the sales tax and the business and occupation tax. The thirteen categories are:
Food for human or pet consumption
Groceries
Cigarettes and tobacco products
Soft drinks and carbonated beverages
Beer and other malt beverages
Wine
Newspapers and magazines
Household paper and paper products
Glass containers
Metal containers
Plastic or fiber containers made of synthetic material
Cleaning agents and toiletries
Non-drug drugstore sundry items
Food consumed at a seller's place of business is generally exempt from the litter tax.
Having Your Cake and Eating It Too
Two of the sellers who contacted me sold dietary supplements. I found this a little strange at first, as I did not think that dietary supplements fit into any of the thirteen categories. My initial thinking was that dietary supplements were specifically excluded from the sales tax food exemption, so why would they be considered food for the litter tax? I then remembered that we are dealing with states and sales tax, so I should never assume anything. After I did a little digging, I found that supplements are indeed not considered food for the sales tax exemption, but they are considered food for the litter tax. This is a great example of the state having its cake and eating it too.
The funds are used by the Department of Ecology for a litter control program employing youth to clean up public places, and for public education and awareness programs relating to litter control and recycling.
So if you sell products in any of the thirteen categories, chances are you are subject to the litter tax. If so, you will want to be proactive before Washington reaches out to you. If you have any questions on the litter tax or any other state and local tax issue contact us here.
By: Michael J. Fleming, CMI
This blog is intended for educational purposes and not as tax advice. Tax policies and procedures change frequently, so specific information, such as thresholds, rates, etc. included in this blog may have changed since it was originally published. Please request a consultation for more in-depth information.