On May 7, 2021, the Washington Department of Revenue issued Excise Tax Advisory 3223.2021, providing guidance on the proper taxation of grocery food and restaurant delivery services provided through marketplace facilitators. Marketplace facilitators that are facilitating the retail sale of prepared food or groceries through its marketplace are responsible for collecting and remitting sales tax on “the full selling price charged to the customer for taxable products, including delivery fees, service fees, and any other charges paid by the customer.” Thus, in a case where the total selling price is $50.00, comprised of $40.00 in prepared food, a $5.00 service fee, and a $5.00 delivery fee, the marketplace facilitator is responsible for collecting and remitting sales tax on the full $50.00 selling price. Marketplace facilitators that are facilitating the retail sale of prepared food or groceries are also subject to Washington business and occupation tax (“B&O tax”) under the “service and other business activities” classification. The marketplace facilitator’s gross income subject to tax includes “all of its commissions, delivery fees, service fees, other fees, and other income for facilitating marketplace sales, whether paid to the marketplace facilitator by the seller or by the purchaser.” For marketplace facilitators that use third-party delivery partners with whom they have a separate contract, the marketplace facilitator remains obligated to report all commissions, service fees, and delivery fees for B&O purposes, without deducting any payment or portion of the fees the marketplace facilitator pays to its third-party delivery partners. The ETA also clarifies marketplace facilitators’ tax collection and remittance obligations under various other arrangements it may have for the delivery of restaurant or grocery food.