How To Calculate Excise Tax In Washington State? (Solution)

Attention: The local REET must be calculated and added to the graduated state rate for the total tax due.

Graduated REET Structure.

Sale price thresholds Tax rate
$500,000 or less 1.10%
$500,000.01 – $1,500,000 1.28%
$1,500,000.01 – $3,000,000 2.75%
$3,000,000.01 or more 3%

What is wa excise tax?

  • An excise tax is a tax directly levied on certain goods by a state or federal government. The most prominent excise taxes collected by the Washington state government are the fuel tax on gasoline and the so-called “sin tax” collected on cigarettes and alcoholic beverages.

What is the formula for excise tax?

Calculate excise tax based on a dollar amount. For example, if real estate is taxed at $1.50 per $100, and the purchase price of a piece of property is $130,000, then the excise tax is $1,950. The equation is $130,000 divided by 100, followed by $1,300 multiplied by $1.50.

What is Washington state excise tax?

Washington state levies a real estate excise tax (REET) on all property sales. This state tax rate is 1.28% of a property’s full selling price.

How much is excise tax in King County Washington?

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.

What is excise tax valuation?

The excise is based on the value of the motor vehicle as determined by the Commissioner of Revenue upon certain percentages of the manufacturer’s list price in the year of manufacture. The excise valuation is not based on the actual purchase price or “book value” of the vehicle.

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How do I pay my excise tax in Washington state?

What method do I use to pay taxes? Your B & O and use tax can be paid using the Combined Excise Tax Return. The only available option for filing your return is electronically using the Washington Department of Revenue’s e-file system.

What is the B and O tax rate in Washington State?

Classification: Retailing B&O tax The Retailing B&O tax rate is 0.471 percent (. 00471) of your gross receipts. In addition, retail sales tax must also be collected on all sales subject to the retailing classification of the B&O tax, unless a specific retail sales tax deduction or exemption applies.

Is excise tax included in closing costs?

Closing costs for sellers can include: Any property taxes that are due. Government excise taxes in some cases. Prorated homeowners association dues.

Is B&O tax the same as excise tax?

Business and occupation tax overview ​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.

What is Seattle excise tax?

Seattle is location code 1726. The 10.1% sales tax rate in Seattle is collected and then distributed as follows: 6.5% goes to the state of Washington, 2.7% will go to the City of Seattle, and. 9% will go to the Regional Transit Authority. These 3 rates add up to the 10.1% total rate.

Is Washington state excise tax deductible?

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. Excise tax paid to your state and local for sale of home would not be business related so not deductible.

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What is the formula for calculating tax incidence?

The tax revenue is given by the shaded area, which we obtain by multiplying the tax per unit by the total quantity sold Qt. The tax incidence on the consumers is given by the difference between the price paid Pc and the initial equilibrium price Pe.

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