How does Washington define a 'retailer' versus a private seller for precious-metals transactions?
Executive summary
Washington now treats sales of precious metal bullion and monetized bullion as taxable retail or wholesale sales for state Business & Occupation (B&O) tax and retail sales tax beginning Jan. 1, 2026, which means sellers who transact “at retail” must collect and remit sales tax and face the retailing B&O rate while wholesale sales can be treated differently when the buyer presents a valid reseller permit [1] [2] [3]. The state defines “precious metal bullion” and “monetized bullion” for these rules but does not publish a standalone statutory redefinition of “retailer” versus “private seller” in the sources provided; instead the tax consequences turn on whether the sale is a retailing transaction (subject to retail sales tax and retailing B&O tax) or a wholesale transaction (subject to wholesaling B&O rules and usually dependent on reseller documentation) as explained by the Department of Revenue [2] [4] [3].
1. How Washington categorizes bullion for tax purposes: content, coins, and timing
Washington’s Department of Revenue treats “precious metal bullion” as processed, smelted or refined metals whose value is based on metal content rather than form, and “monetized bullion” as coins or other forms of money manufactured from precious metals that function as legal tender under government law; the 2026 change removes these items from their prior exclusion and makes gross receipts from their sales taxable as sales of tangible personal property [2] [1] [4].
2. Practical test used by Washington: retailing vs wholesaling depends on the nature of the sale, not seller label
Whether a transaction is taxed as a retail sale turns on the nature of the transaction—if gross income from the sale is “retailing” income, it is subject to the retailing B&O tax and retail sales tax; conversely, wholesale transactions are taxed at the wholesaling B&O rate and generally permit purchasers to buy tax-free only if they present a valid reseller permit or otherwise meet wholesale conditions [3] [4]. Washington’s guidance therefore effectively defines “retailer” for bullion purposes by function—those engaged in sales “at retail” to the public—rather than by an isolated identity of “private seller,” and the tax classification follows the sale’s character [2] [3].
3. Federal definitions and how they intersect with state rules
Federal rules for dealers in precious metals distinguish a “retailer” as a person engaged in sales primarily to the public and define “dealer” as a business purchasing and selling covered goods, with certain thresholds and exemptions for transactions that look more like consumer retail trades than dealer purchases; these federal definitions (31 CFR Part 1027) can overlap with state determinations when classifying the market-facing nature of transactions, though federal rules address anti-money-laundering and reporting obligations rather than state tax liability [5].
4. Where “private seller” fits — limited explicit guidance and a practical gap
Washington’s publicly available tax guidance explains taxes that apply to retail versus wholesale bullion sales and notes special treatments (e.g., bullion used for manufacture into jewelry is treated according to sale nature) but does not frame a statutory, stand‑alone definition of “private seller” in the documents provided; therefore whether an occasional private sale escapes retail treatment depends on factual circumstances of the sale (frequency, marketing to the public, whether it resembles a retail transaction) rather than a single label, and that factual judgment is where uncertainty remains in publicly published DOR materials [2] [4].
5. Implications, conflicts, and who to watch for interpretation
Industry advisories and tax commentators emphasize that the result is practical: dealers and anyone selling bullion to the public must plan to collect sales tax and report retailing B&O income unless the transaction can clearly be characterized and documented as wholesale (resale certificate, business-to-business sale) or as a non-taxable paper-currency/legal-tender exception where applicable; consumer-facing dealers warn prices will rise because sellers will pass on the tax while some private-market participants and commentators note lingering questions about numismatics, occasional private sales, and delivery/repurchase arrangements that may trigger other regulatory regimes [3] [6] [7] [8].