Washington state Dept. of Revenue clarifies exemptions on retail goods used in tribal fishing activities
What sellers need to know now
The Washington State Department of Revenue recently clarified a sales tax exemption on sales of retail goods and services used in tribal fishing activities to include tribal hunting and gathering activities by qualified purchasers.
Beginning April 1, 2022, sales of qualifying goods and services used for qualified fishing, hunting, and gathering activities to qualified purchasers are exempt from sales tax, regardless of where the delivery of those goods and services takes place. The clarification aims to bring the state’s tax exemption in line with the Tribes’ tax-exempt status.
The clarification of the longstanding exemption comes after a series of consultation meetings with the Tribes, and two meetings with representatives from the Tribes, Revenue, and Washington’s business associations, including the National Federation of Independent Business. The meeting with the business associations was to discuss the exemption and how to streamline and update the existing exemption form.
In the past, retailers expressed confusion and disagreement when trying to decide what goods and services qualified for the sales tax exemption. Some retailers also had been subject to tax assessments for improperly granting the exemption, and an increasing number of retailers refused to allow the exemption in their establishments. This led the Tribes to voice concerns about retailers not allowing the exemption when making a sale.
Previous court decisions have ruled that there is no difference between a tribe’s right to fish and its privilege to hunt and gather, a consideration that has not been reflected in the state’s tax guidance.
Revenue recognized the need to clarify this exemption after considering the previous court decisions, and input received at consultation with the Tribes and from meetings with business associations.
As an aid to retailers, Revenue has several lists and tools published on its website:
- Streamlined Tribal Fishing, Hunting, and Gathering form to fill out when making qualified exempt sales to a qualifying tribal member.
- Interim guidance on the expanded exemption.
- Non-exhaustive list of goods and services that qualify for the exemption as well as intertribal organizations who may also purchase goods and services tax exempt.
As part of the exemption expansion and included in the Interim guidance, Revenue created a “safe harbor” provision. If retailers sell retail goods or services used directly in fishing, hunting, and gathering activities in good faith to a tribe with fishing, hunting, and gathering rights in Washington, members of those tribes or a qualified intertribal organization, they won’t be liable for uncollected sales tax.
Find more information on the expanded Tribal Fishing, Hunting and Gathering exemption on Revenue’s website.