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Washington: 'Tis the Season to Tax Soft Drinks


 If you sell it, know how to tax it.

State departments of revenue can be mysterious entities. Why, for example, did the Washington State Department of Revenue recently feel compelled to publish a special notice regarding the taxability of soft drinks? Is it that more businesses are selling more beverages during this time? Are new beverage-selling businesses cropping up? Why beverages? Why now?

Whatever the reason, it seems it is time to review how Washington sales and use tax applies to soft drinks and other beverages. So here goes.

Taxable

The following beverages are subject to Washington sales tax:

  • Beer and wine
  • Prepared beverages (hot or iced coffee and tea, fountain or blended drinks)
  • Soft drinks (sweetened beverages with 50% or less fruit or vegetable juice and no milk or milk substitutes), including but not limited to:
    • Bottled tea or coffee that is sweetened but has no milk
    • “Energy” drinks
    • Flavored water with sweeteners
    • “Juices” containing 50% or less fruit or vegetable juice
    • Lemonade
    • Soda pop
    • Sports drinks
    • Tonic water

Spirits are subject to a special spirits sales tax and a spirits liter tax in Washington.

Exempt

The following beverages are exempt from Washington sales tax when sold in sealed containers:

  • Concentrated, frozen, or powdered beverages
  • Milk
  • Milk products
  • Milk substitutes
  • 50% of vegetable juice (by volume)
  • 50% of fruit juice (by volume)

Food stamps

Eligible foods purchased with food coupons under Supplemental Nutrition Assistance Program are exempt from sales tax, even normally taxable soft drinks. Additional information.

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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.