Real estate excise tax (REET) is a tax on the sale of real property. All sales of real property in the state are subject to REET unless a specific exemption is claimed. … REET also applies to transfers of controlling interest (50% or more) in entities that own real property in the state.
What is the purpose of an excise tax?
Excise duties usually have one or two purposes: to raise revenue and to discourage particular behavior or purchase of particular items. Taxes such as those on sales of fuel, alcohol and tobacco are often “justified” on both grounds.
Which is an example of an excise tax?
Excise taxes are most often levied upon cigarettes, alcohol, gasoline and gambling. These are often considered superfluous or unnecessary goods and services. To raise taxes on them is to raise their price and to reduce the amount they are used. In this context, excise taxes are sometimes known as “sin taxes.”
Who pays B&O tax in Washington?
The tax amount is based on the value of the manufactured products or by-products. The Manufacturing B&O tax rate is 0.484 percent (0.00484) of your gross receipts. For products manufactured and sold in Washington, a business owner is subject to both the Manufacturing B&O Tax and the Wholesaling or Retailing B&O Tax.
Is Washington state excise tax deductible?
Unfortunately, not. The IRS does not consider it a “sales tax” so you can’t use it for the State & Local Sales Tax deduction. … You may reduce the proceeds of your sale by the amount of excise tax paid on the transaction, however, which will in turn reduce any capital gains on the transaction.
What states have no excise tax?
Alaska, Delaware, Montana, New Hampshire, and Oregon don’t impose any state sales taxes.
What is meant by excise tax?
Excise taxes are taxes that are imposed on various goods, services and activities. Such taxes may be imposed on the manufacturer, retailer or consumer, depending on the specific tax.
What are the two types of excise tax?
TYPES OF EXCISE TAX:
- Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement.
- Ad Valorem Tax – refers to the excise tax which is based on selling price or other specified value of the goods/articles.
What is the major difference between a sales tax and an excise tax?
Excise duty applies to specific goods and services while sales tax is charged for a much broader range of things. Sales tax is typically charged as a percentage of the cost, while excise duty can be charged as a percentage of the cost or on a per-unit basis.
What states have an excise tax?
Twelve states (Alaska, Arizona, California, Delaware, Illinois, Maine, Michigan, New Jersey, New Mexico, Oklahoma, Pennsylvania, and Wisconsin) have a cigarette excise tax from $2.000 to $2.999 per pack.
Is Washington B&O tax an excise tax?
Washington’s B&O is an excise tax measured by the value of products, gross proceeds of sales, or gross income of a business with over 30 different classifications and associated tax rates ranging from 0.138 percent to 1.5 percent.
Who Must File Washington state tax return?
Since Washington does not collect an income tax on individuals, you are not required to file a WA State Income Tax Return. However, you may need to prepare and efile a Federal Income Tax Return.
How much do you have to make to file taxes in Washington state?
You must register with and pay taxes to the Department of Revenue (DOR) if you meet any of the following: You are required to collect sales tax. Your gross income equals $12,000 or more per year. You are required to pay other taxes or fees to DOR.
Can I write off excise tax?
An excise tax isn’t deductible if it’s for a personal expense. You can deduct as a business expense excise taxes that are ordinary and necessary expenses of carrying on your trade or business. … Include state and local sales tax, or any excise tax paid on the purchase of a vehicle as part of the cost of the vehicle.
What is the King County excise tax rate?
The Real Estate Excise Tax, or REET, which currently charges a flat 1.78% on all transactions in most of King County, will implement a graduated levy that will significantly impact sellers of homes priced above $1.5 million.
How much is tax on a used car in Washington state?
Washington has a mandatory “use tax” that is assessed to you when you register your vehicle at the DMV and ownership is transferred from the previous owner to you. The tax amount is based upon the value of the vehicle at the time of purchase, and is the same retail sales tax of 6.5%.