State law regulates the manufacture, distribution, and retail sale of liquor including spirits, wine, and malt liquor.  The Washington State Liquor and Cannabis Board (LCB) oversees issuance of spirits retail licenses and related matters.  The Washington State Department of Revenue (DOR) collects taxes related to sales of spirits in the state.
 
Definitions.  Spirits are defined as any beverage which contains alcohol obtained by distillation, except flavored malt beverages, but including wines exceeding 24 percent of alcohol by volume.  Wine is defined as any alcoholic beverage obtained by fermentation of fruits, such as grapes, berries, or apples, or other agricultural product containing sugar, to which any saccharine substances may have been added before, during, or after fermentation, and containing not more than 24 percent of alcohol by volume, including sweet wines fortified with wine spirits, such as port, sherry, muscatel, and angelica, not exceeding 24 percent of alcohol by volume and not less than 0.5 percent of alcohol by volume.  Malt beverage or malt liquor is defined as any beverage such as beer, ale, lager beer, stout, and porter obtained by the alcoholic fermentation of an infusion or decoction of pure hops, or pure extract of hops and pure barely malt or other wholesome grain or cereal in pure water containing not more than 8 percent of alcohol by weight, and not less than 0.5 percent alcohol by volume.

Licenses and Fees.  A spirits retail license allows a licensee to:

• sell spirits in original containers for consumption off the licensed premises and to permit holders;
• sell spirits in original containers to licensed retailers for consumption on the premises or for resale at their licensed premises, but may not exceed 24 liters; and
• export spirits.

Each licensee must pay a 17 percent spirits retail license issuance fee on all spirits sales.  This fee does not apply to craft distilleries selling its own production, and former state store auction buyers and former contract liquor store managers if selling to retailers licensed to sell spirits for consumption on the premises for resale at their licensed premises.  Fees are collected by the LCB and deposited into the liquor revolving fund.
 
Taxes.  There are two types of spirits taxes: (1) a spirits sales tax (SST), based on the selling price of spirits in their original package; and (2) a spirits liter tax (SLT), based on the volume of spirits being sold in the original package.  The SST is applied in the following manner:

• SST tax rate paid by the general public equals 20.5 percent; and
• SST tax rate paid by on-premises retailers on purchases from distributors, distillers, and so forth equals 13.7 percent.

The SLT is applied in the following manner:

• SLT tax rate paid by the general public equals $3.7708 per liter; and
• SLT tax rate paid by on-premises retailers on purchases from distributors, distillers, and so forth equals $2.4408 per liter.

Business and occupation taxes also apply to the manufacture and sale of spirits.  The general retail sales tax of 6.5 percent does not apply to sales of spirits in the original package.

Definitions.  Low-proof beverage means any beverage that contains more than 0.5 percent alcohol by volume and less than 7 percent alcohol by volume, but does not include wine, malt beverages, or malt liquor.
 
Licenses and Fees.  The sale of low-proof beverages is exempt from the 17 percent spirits retailer license issuance fees.
 
Taxes.  A $0.99 tax per gallon is established on the distribution and sale of low-proof beverages.  This tax must be paid by distilleries and craft distilleries self-distributing low-proof beverages to retailers and when selling directly to consumers.  Low-proof beverages are exempt from retail sales taxes on spirits.