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Washington Clarifies Taxability of Soft Drinks

  • Nov 7, 2012 | Gail Cole

The State of Washington is a full member of the Streamlined Sales and Use Tax Agreement, or SSUTA. As such, its laws, rules, regulations and policies are in compliance with the SSUTA, which was created to "simplify sales tax collection," particularly for "retailers operating in multiple states."

Washington has adopted the SSUTA guidelines for food and food ingredients, which "are exempt from retail sales tax unless they fall within the definition of 'soft drink,' 'dietary supplements,' or 'prepared foods.'" The state recently released a special notice updating the Taxability of Soft Drinks, pursuant to SSUTA guidelines. In it, the Washington Department of Revenue underscores that soft drinks are subject to retail sales tax.

Soft Drinks are:

Soft drinks are defined as "nonalcoholic beverages sold in any manner … that contain natural or artificial sweeteners." These include:

  • "Sports drinks;
  • Bottled tea/coffee, sweetened, no milk;
  • Lemonade;
  • Soda pop;
  • Tonic water;
  • Flavored water with sweeteners;
  • 'Juices' with 50% or less fruit juice;
  • 'Energy' drinks."

Soft drinks are not:

  • "[B]everages that contain any milk, milk products, or milk substitutes… ."
  • Beverages that "contain more than 50% vegetable or fruit juice by volume… ."
  • "[F]rozen, powdered, or concentrated beverages."

The special notice clarifies that any beverage "served with an eating utensil provided by the seller" is subject to sales tax because it is considered a prepared food. This includes, but is not limited to, coffee, soda, or juice from a fountain. It is interesting to note that, while milk is a factor in determining taxability, carbonation is not relevant for sales tax purposes. Go figure.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.