Washington State Tax
Washington Income Tax
Washington is one of the seven states that do not collect income tax. However, individuals and corporations located in the state must pay other types of taxes. Consumers pay various state and local sales taxes while business entities are subject to several business taxes.
Any individual or business that sell, rent, or lease tangible goods and services must collect sales taxes for the state. Use tax is collected at times when sales tax is not applicable. Such situations include mail, online, and other purchases made outside the state.
The basic state sales tax rate in Washington is 6.5%. However, actual sales taxes may increase to up to 9.5% due to due to local taxes levied by counties and municipalities. There are over 700 special sales tax jurisdictions in Washington. Sales and use tax is the largest source of tax revenue in the state. State tax returns are collected by the Washington State Department of Revenue.
Although Washington State does not levy taxes on personal income, it does require business entities and companies to pay business and occupation task based on their gross income. Business tax rates are determined by the amount of income and the classification of the business.
Washington tax law requires all individuals and companies to pay property tax for all taxable properties including houses, land, vehicles, and other assets. Unlike state taxes collected in Washington, property tax collections do not go to the state government. The value of a property and the corresponding property tax are assessed by the county, municipality, or district where it is located.