In Washington State in 2025, sales tax is managed by the Washington Department of Revenue, and is calculated based on a combined rate consisting of:
- A statewide sales tax rate: This is a fixed rate of 6.5%.
- Local sales tax rates: These rates vary depending on the specific location where the sale occurs (city, county, or special taxing district). Local rates can range from 0% to as high as 4.1%.
In Bellevue, where I live, the Sales Tax is 10.2% (6.5% State;3.7% Local).
Here’s how the calculation works:
- Total Sales Tax Rate = Statewide Rate (6.5%) + Applicable Local Rate
- Sales Tax Due = Taxable Amount × Total Sales Tax Rate
Example:
If you make a purchase in Seattle, the calculation would look something like this:
- State Rate: 6.5%
- Seattle Local Rate: Up to 3.85%
- Special Sales Tax Rates (if applicable): Up to 0.90%
- Combined Rate: 6.5% + Up to 3.85% + Up to 0.90% = Up to 10.35%
- Sales Tax Due: Taxable Amount x Combined Rate (up to 10.35%)
Important Points:
- Destination-Based Sales Tax System: Washington uses a destination-based sales tax system, which means the sales tax rate is determined by the buyer’s location.
- Taxable Items: The sales tax generally applies to retail sales of tangible personal property, certain services (including some technology and digital services starting Oct 1, 2025), and digital products transferred electronically.
- Exemptions: Certain items, such as groceries (with some exceptions), prescription drugs, and manufacturers’ machinery and equipment, are exempt from sales tax.
- Tax Rate Lookup: Businesses are responsible for collecting and remitting the correct sales tax. The Washington Department of Revenue provides tools and resources to help businesses determine the correct tax rate for each location, including an online Tax Rate Lookup Tool.
To accurately calculate sales tax in Washington State in 2025, you need to know the specific location of the sale and use the appropriate combined sales tax rate. You can find detailed information on local rates through resources provided by the Washington Department of Revenue.
Washington State has a unique tax structure compared to many other states, and how residents perceive their tax burden can vary depending on their income and spending habits.
Key Characteristics of Washington’s Tax System:
- No Personal Income Tax: Washington is one of a handful of states that does not have a broad-based personal income tax.
- High Sales Tax: To compensate for the lack of income tax, Washington has a relatively high combined state and local sales tax rate, which is currently the fourth-highest in the nation.
- Moderate Property Taxes: Property taxes in Washington are considered to be in the middle range compared to other states. The effective property tax rate on owner-occupied homes is around 0.76%.
- Capital Gains Tax: Washington imposes a 7% tax on certain capital gains income above $250,000.
- Business and Occupation (B&O) Tax: The state levies a gross receipts tax on businesses, which is considered a significant part of the state’s tax revenue.
Overall Tax Burden:
- Rankings: Washington’s tax system ranks 45th overall on the 2025 State Tax Competitiveness Index, primarily due to its high sales tax and gross receipts tax, according to the Tax Foundation.
- Tax Burden: While opinions may vary, Washington’s tax burden as a percentage of personal income has generally been lower than the U.S. average since 2000. The average state and local tax burden in Washington is about $6,644 per capita.
- Regressive Tax Structure: Due to the emphasis on sales taxes, Washington has a relatively regressive tax structure, meaning that lower-income households tend to pay a larger percentage of their income in taxes compared to higher-income households.
In summary, Washington offers the benefit of no personal income tax, but this is offset by relatively high sales taxes. The overall tax burden can vary depending on an individual’s financial situation and spending habits.
