Progress Payments Qualify for Interstate and Foreign Sales Tax Deduction

Monday, November 6th, 2017

Close-up of man restoring vehicle.

The Washington Department of Revenue recently ruled that progress payments for ongoing vehicle restoration projects are eligible for the interstate and foreign sales tax deduction.

The taxpayer provided vehicle restoration services. Certain nonresident customers made progress payments for ongoing projects. The taxpayer took the interstate and foreign sales tax deduction for those payment, but was denied because the payments were for vehicles that were still in Washington.

Washington exempts repairs performed on property shipped into the state by nonresidents if the seller "agrees to, and does" deliver the property to the purchaser outside of Washington. The ruling found that the deduction applied to payments made on property still located in Washington as long as the agreement called for out-of-state delivery upon completion.

Note that the deduction does not apply for B&O tax purposes because the taxpayer's services are performed in Washington. Payments Qualify for Interstate and Foreign Sales Tax Deduction

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Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

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