Revolving fund purchases of Tangible Personal Property (TPP) are subject to either Sales Tax or Use Tax. Use tax is a tax on items used in Washington when sales tax has not been paid. This is based on the Washington State Retail Sales Tax Code.

When the receipt does not show that sales tax has been charged, the department is responsible for calculating the use tax when requesting reimbursement. Some common situations:

Item was purchased from out-of-state
Item was purchased from the internet
Item was a subscription
Services are NOT subject to use tax

Use Tax is charged directly to the department's budget. It will not be included with the reimbursement

Calculating Taxes

The tax rates as of 4/1/2009 are:

Bothell 9.5%
Seattle 9.5%
Tacoma 9.3%

New rates generally come into effect every April 1st. The Use Tax rate should be based on the rate for the location where the items will be used. Tax rates for other locations can be found at the Sales Tax Rates website.

If the vendor is located in the State of Washington, include the cost of shipping when calculating tax. If the vendor is from outside of the state, exclude shipping charges when calculating the tax. Cost of a warranty would be considered as part of the cost of the merchandise.

Enter the use tax on the Departmental Revolving Fund Invoice Voucher. Include it next to the item’s amount under the column heading “Use Tax”. The amounts in the Use Tax column are not to be included in the Invoice Total and are not included in the reimbursement to the department. The entry is only to record the amount of tax that should be charged to the budget.

Revolving Funds

Overview

Funded Balance

Reimbursing Your Fund

Allowable Expenses

Custodian Responsibilities

Forms

Contacts

Sales and Use Tax

Calculating Taxes