DOR Publishes New Guidance on Casual or Isolated Sales: What Registered Businesses Need to Know

What Changed

On July 7, 2026, the Washington Department of Revenue published a new tax topic page titled Casual or Isolated Sales. The page consolidates the definition, taxability rules, and reporting requirements for this category of sale in one accessible reference. While the underlying rules are not new—they trace back to existing WAC and RCW provisions—the publication of a dedicated, plain-language topic page signals that DOR considers this an area worth clarifying for taxpayers.

---

The Core Definition

A casual or isolated sale is a sale made by a person who does not engage in selling that type of property in their regular course of business. The key distinction is regularity and continuity: if sales of a particular type of property are routine or continuous, they fall outside this category—even if they don't happen frequently.

DOR's own examples illustrate the concept well:

• An attorney selling used office furniture
• A bookkeeper selling a refrigerator
• A contractor selling a bulldozer

In each case, the seller's primary business does not involve selling that type of property. The sale is incidental, not operational.

---

B&O Tax Treatment

Casual or isolated sales are not subject to B&O tax—but the reporting mechanics still require attention.

For sales to a consumer (retail sales):

• The transaction is reported under retailing B&O tax
• A "casual sales" deduction may be claimed under retailing B&O, effectively zeroing out the B&O liability
• Retail sales tax still applies if the seller is required to be registered with DOR
• Critically, the casual sales deduction is not available against retail sales tax

For sales to a customer who provides a reseller permit (wholesale sales):

• The transaction is reported under wholesaling B&O tax
• A "casual sales" deduction may be claimed under wholesaling B&O

The practical takeaway: the B&O deduction eliminates the B&O tax burden, but it does not eliminate the sales tax obligation on retail transactions.

---

The Registration Trigger Matters

A critical threshold runs through this entire framework: whether the seller is required to be registered with DOR.

• Registered sellers must report casual or isolated sales, even though a deduction offsets the B&O liability.
• Registered sellers must collect and remit retail sales tax on casual or isolated retail sales.
• The guidance does not explicitly address the treatment for sellers who are not required to be registered. If your client's registration status is unclear or borderline, verify against WAC 458-20-101 before drawing conclusions.

This is a meaningful distinction for businesses that may assume an incidental asset sale carries no Washington tax consequences simply because it falls outside their normal operations.

---

Practical Scenarios to Watch

A few situations where this guidance is directly relevant:

• Equipment disposals: A manufacturer selling surplus machinery. If the manufacturer is registered with DOR, retail sales tax likely applies to the sale, and the transaction must be reported—even though B&O tax is offset by the deduction.
• Office asset sales: A professional services firm selling workstations or furniture. Same framework applies.
• Business reorganizations: WAC 458-20-106 is cited as a reference, suggesting that asset transfers in reorganization contexts may intersect with casual sale treatment. This area warrants separate analysis depending on the transaction structure.

---

Key References

DOR cites the following authority on the topic page:

• WAC 458-20-101 – Tax registration and tax reporting
• WAC 458-20-106 – Casual or isolated sales; business reorganizations
• RCW 82.04.040 – Statutory definition of "casual or isolated sale"

Review these sources directly for the authoritative rules. The tax topic page is a useful summary, but the WAC and RCW govern.

---

Editorial Note

This post is based on DOR's newly published tax topic page and the underlying regulatory references cited therein. The guidance summarizes existing law rather than announcing a rule change. Practitioners should verify current registration status, deduction availability, and sales tax obligations against the cited WAC provisions and consult the full statutory text as needed. This draft is not legal or tax advice and should be reviewed before publication.

Official source

View the Washington Department of Revenue guidance