Washington State Tax Rate

Washington State does not have a personal or corporate income tax but relies on other taxes, most notably a state sales tax of 6.5%.

The total sales tax rate a consumer pays varies by location due to additional local taxes, with the average combined rate around 9.47% and a maximum of over 10%.

Washington State Tax Rates

Sales and Use Tax:

• State Rate: 6.5%.
• Local Rates: Cities and counties add their own sales taxes, which vary by location. The combined state and local sales tax rate can range from 6.5% to over 10.4% (e.g., Seattle’s rate is 10.35%).
• Determining the Rate: The rate is determined by where the buyer receives the goods or services (destination-based sales tax). You can use the Washington Department of Revenue’s Tax Rate Lookup Tool to find the exact rate for a specific address.
• Exemptions: Groceries and prescription drugs are generally exempt from retail sales tax, but prepared food is not.

Property Tax

Effective Rate: The average effective property tax rate (taxes as a percentage of home value) is about 0.75% statewide, though this varies by county.

Real Estate Excise Tax (REET): A tax paid by the seller on real estate sales, with rates tiered based on the sale price:

• 1.10% on sales of $525,000 or less
• 1.28% on sales between $525,000.01 and $1,525,000
• 2.75% on sales between $1,525,000.01 and $3,025,000
• 3.00% on sales over $3,025,000.01

Business and Occupation (B&O) Tax

This is a gross receipts tax on business activities, meaning no deductions are made for labor, materials, or other costs. Common rates include:

• Retailing: 0.471% of gross receipts.
• Wholesaling: 0.484% of gross receipts.
• Service & Other Activities: 1.5% of gross income.

Other Related Taxes

Capital Gains Tax: A 7% tax on long-term capital gains over a certain threshold ($270,000 as of early 2024; a new tiered rate structure begins with tax year 2025, where gains over $1 million are taxed at 9.9%). Real estate sales and retirement investments are exempt.

• Estate Tax: Applied to estates valued over $2.193 million, with rates ranging from 10% to 20%.
• Gas Tax: 59.04 cents per gallon.
• Spirits Tax: Washington has high spirits taxes, including a 20.5% sales tax for retail and a volume tax of over $3 per liter.
• Marijuana Tax: A 37% excise tax on the sales price of recreational marijuana.