Retail Sales and Use Tax.
Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services.  A retail sale is a sale to the final consumer or end user of the property, digital product, or service.  If retail sales taxes were not collected when the user acquired the property, digital products, or services, then use tax applies to the value of the property, digital product, or service when used in this state.  The state, all counties, and all cities levy retail sales and use taxes.  The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary from 0.5 percent to 4.0 percent, depending on the location.
 
Tax Preferences.
State law provides for a range of tax preferences that confer reduced tax liability upon a designated class of taxpayer.  Tax preferences include tax exclusions, deductions, exemptions, preferential tax rates, deferrals, and credits.  Currently, Washington has over 650 tax preferences, including a variety of sales and use tax exemptions.  Legislation that establishes or expands a tax preference must include a Tax Preference Performance Statement (TPPS) that identifies the public policy objective of the preference, as well as specific metrics that the Joint Legislative Audit and Review Committee (JLARC) can use to evaluate the effectiveness of the preference.  All new tax preferences automatically expire after 10 years unless an alternative expiration date is provided.

Packing Materials Exemption.
A retail sale does not include the purchase of tangible personal property for the purpose of resale in the regular course of business without an intervening use by such person.  In addition, a retail sale does not include the renting or leasing of tangible personal property to consumers.
 
A recent Washington Court of Appeals decision determined that reusable wooden pallets utilized as part of a packing materials pool constituted a "retail sale" and was subject to retail sales and use taxes.

The renting or leasing of packing material under a packing material sharing and reuse program is not a retail sale and is not subject to retail sales and use tax. 
 
A "packing material sharing and reuse program" is defined as a system for sharing reusable packing materials involving more than one person.  "Reusable packing materials" means all reusable boxes, crates, or pallets used to package or contain personal property.