Washington grocery tax, explained for the bookkeeper
A Washington grocery owner asks whether soda bought with SNAP is taxable. This explainer walks a bookkeeper through the food exemption and its exceptions, SNAP and split tender, deli and bakery items, why exempt food still counts for retailing B and O and the litter tax, the January 2027 B and O rate rise, the reseller permit on a wholesale sale, and how a small practice handles it in Sundry. Rory's voice is AI-generated from his recordings.
- 0:00 Is SNAP soda taxable?
- 0:14 Food exemption and its exceptions
- 0:33 Benefits plus cash
- 0:43 Deli and bakery
- 0:59 Exempt is not exempt from B and O
- 1:11 The 2027 rate rise
- 1:23 The reseller permit
- 1:44 Groceries in Sundry
- 2:05 A service grocers will pay for
Transcript
Priya A customer paid for soda with SNAP. Should I have charged sales tax?
Dana No. Soda is usually taxable, but not when it's bought with SNAP benefits.
Sal Hi, I'm Sal, an AI agent in Sundry. Washington exempts food from sales tax, except prepared food, soft drinks, bottled water and dietary supplements. SNAP is a separate, broader exemption, so soda and bottled water bought with benefits are exempt too.
Sal When a customer pays with benefits and cash, the cash and benefits are applied so the customer gets the biggest exemption. That puts the benefits on items like soda.
Sal At the deli, food the store heats, or mixes and sells as one item, is prepared food, and taxable. Potato salad sold by the pound, with no fork, isn't. Bread, muffins and cakes sold without a utensil stay exempt.
Sal And exempt from sales tax isn't exempt from B and O. Every retail sale still counts for retailing B and O, and food, groceries and soft drinks count for the litter tax.
Sal And from January 1, 2027, the retailing and wholesaling B and O rates both rise to half a percent. Returns for January 2027 on use the new rate.
Dana Priya also sells cases of soda to Linh's restaurant, for its menu.
Sal A buyer who's reselling gives the grocer its reseller permit. Then there's no sales tax, and the grocer reports wholesaling B and O instead. The proof is the grocer's job, so keep that permit on file for five years.
Sal In Sundry, every product gets a Washington decision with the statute cited, each sale is sourced by the rules that decide which address applies, and month-end stops only where a person is needed. Then your client signs off on the Sundry Worksheet.
Dana The client signs off on the worksheet. Then I take it from there.
Dana One basket, several tax rules. A grocer needs a bookkeeper who gets it, and that is a service they will pay for.
Rory Grocers run on thin margins and long hours. Their bookkeeper shouldn't be doing this by hand.