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rjmooney
New Member

Can sales tax be applied to the B&O tax in this case? i.e., Are taxes taxable?

In WA, I recently reviewed an invoice where a firm passed the state B&O tax on to a customer as a line item and then included that tax (along with the price of the good and services) in the subtotal amount used to calculate the sales tax. I was under the impression taxes themselves were not taxable and that the sales tax should have been applied to the goods and services exclusive of the B&O tax. However, I cannot find documentation to support this.
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1 Reply
MarilynG1
Expert Alumni

Can sales tax be applied to the B&O tax in this case? i.e., Are taxes taxable?

Washington State Dept. of Revenue notes that 'The retail sales tax is collected on the selling price of an item'.

 

The Business & Occupation Tax is paid separately by the retailer on certain goods and services, which would appear that it should not be added to the selling price of an item when figuring sales tax.

 

You could contact your State Dept. of Revenue for more clarification. 

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