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November 17, 1970
The Honorable Frank George Marzano
2501 So. Melrose Street
Cite as: AGLO 1970 No. 149
This is in response to your letter of October 22, 1970, in which you inquire as to the applicability of the state sales tax (and presumably a local sales tax, if a local sales tax has been enacted in the jurisdiction involved) to purchases of food by means of food stamps.
In order to understand the problem involved here it should be noted that the food stamp program involves at least three separate transactions.
The first transaction is the purchase of the stamps by the individual from the federal agency. The second transaction is the exchange of food for stamps between the retailer and the individual. The third transaction is the exchange of the stamps by the retailer (or more precisely by the retailer's bank) for money from the Federal Reserve Bank.
The taxable transaction under our law is the second one, i.e., the exchange of stamps for the food. And this is a transaction in which the Federal government is not directly involved.
Admittedly, it is the Federal government which is supplying, at least to the extent of the discount, the money for the purchase of this food. But the fact that the money to purchase the food is, so to speak, ultimately being furnished by the Federal government does not make the Federal government purchaser under our statutes, i.e., under RCW 82.08.050. See Murray v. State, 62 Wn.2d 619.
In order for the sale to be exempt, the Federal government itself must be the buyer of the food, within the meaning of the above cited statute. Under the tests laid down by our Supreme Court in the above cited case, we do not believe that the Federal government is the buyer in the factual situation outlined in your letter.
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Moreover, even if we were not to reach this conclusion that the sales tax is applicable, the use tax would be applicable in any event. In other words, even if the United States could be considered as buying the food from the retailer for the individual, the use tax is applicable to the use or consumption of that food. See RCW 82.12.020. And in such a case the retailer is statutorily required to collect the tax. See RCW 82.12.040.
Under either line of reasoning, therefore, the result is the same; i.e., an excise tax (either the sales tax or the use tax) payable at the same percentage rate (see RCW 82.08.020 and RCW 82.12.020) must be collected on all the sales in question. Any change in the result would require specific legislation creating an exemption to cover food stamp sales.
Very truly yours,
FOR THE ATTORNEY GENERAL
Timothy R. Malone
Assistant Attorney General