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Washington Excise Tax Confusion

We’ve had number of questions recently from wineries that are confused about the excise tax requirements in Washington. Apparently, the Washington LCB is now just outright rejecting winery submissions if they do not use the correct form.

To provide a little background on this issue, Washington adopted a limited direct model on July 1st, 2006. At that time, out-of-state wineries could apply for a wine shippers permit if they planned to only ship directly to Washington consumers or for a Certificate of Approval (COA) if they are selling to distributors or directly to retailers. COA holders can get an additional no-fee endorsement to also ship wine directly to consumers. Many out-of-state wineries held a COA prior to the July 1st changeover from reciprocity to the permit system.

The question is whether a given winery should submit FORM LIQ-870 or FORM LIQ-778. The answer, according to the Washington LCB, is straightforward. If you are a COA holder, your name will appear on this list and you should file from LIQ-778 and report your direct to consumer sales on line 10. If you are a wine shippers permit holder only, your name should appear on this list and you should fill out from LIQ-870.

Oh, and just in case you weren’t confused before, Washington calls their sales tax reports “Combined Excise Tax Returns” and their excise tax forms “Summary Tax Reports”.

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