Exempt from sales tax is not exempt from B&O.
Washington exempts most food from retail sales tax, but there is no matching exemption from B&O tax. Gross proceeds from exempt food still count toward retailing B&O (WAC 458-20-244).
Transcript
Sal Washington exempts most food from retail sales tax. But there is no matching exemption from B and O tax. The gross proceeds from exempt food still count toward retailing B and O.