Washington has recently released guidance discussing the 75% prepared food rule. Taxpayers whose prepared food sales are greater than 75% of their total food sales must collect sales tax on all food sales. This rule does not apply to sales of food containing four or more servings packaged for sale as a single item and sold without utensils. Taxpayers that do not collect tax on all food sales must prove they are below the 75% threshold.
Taxpayers with multiple locations may calculate a separate prepared food percentage for each location or one overall percentage from all locations in the state using either the prior fiscal year or current fiscal year sales figures. Taxpayers must use the same calculation methods for all locations after choosing one. Taxpayers can only change their chosen calculation methods with written consent from the Department of Revenue.