Washington State is increasing the fee on reusable plastic carryout bags from 8 cents to 12 cents starting January 1, 2026. The paper bag fee remains unchanged. This change impacts how retailers handle bag charges and sales tax reporting.
What Washington Retailers Need to Know About the Upcoming Bag Fee Increase
Retailers across Washington—especially grocery stores, convenience stores, and retail chains—should prepare for a change to the carryout bag fee. Beginning January 1, 2026, the cost charged to customers for reusable plastic bags will increase by 50%, from 8 cents to 12 cents per bag. This will require updates to point-of-sale systems, customer receipts, and tax reporting practices.
Customers who use state or federal food assistance benefits remain exempt from this fee.
Details on Washington’s Updated Bag Fee Rules
What’s Changing in 2026
- Reusable plastic carryout bags will see their fee rise from 8 cents to 12 cents per bag
- Compliant paper carryout bags will remain at 8 cents per bag
- This fee increase takes effect January 1, 2026
Who Is Exempt
Retailers must not collect the fee from customers using:
- WIC (Women, Infants, and Children)
- SNAP (Supplemental Nutrition Assistance Program)
- TANF (Temporary Assistance for Needy Families)
- Washington’s Food Assistance Program (FAP)
Food banks and food assistance programs are also not required to collect this fee.
Reporting and Taxability
- The bag fee is considered a retail sale, meaning it’s subject to sales tax, even if other items in the transaction are tax-exempt.
- Retailers must report the charge under:
- Retailing B&O Tax classification
- Retail Sales Tax classification
- Retailing B&O Tax classification
- A Compliant Carryout Bag Charge deduction is available for the Retailing B&O classification.
- The fee is retained by the retailer—it’s not remitted to the state (but the associated tax due IS remitted).
Local Ordinance Considerations
Local carryout bag fees are overridden by the state law, unless the local ordinance:
- Was enacted before April 1, 2020, and
- Imposes a 10 cents fee
In these limited cases, the local fee remains until December 31, 2025 and is replaced by the state fee starting January 1, 2026.
Next Steps for Washington Retailers
Prepare for Fee and System Updates
- Update your POS system to reflect the new 12 cents charge for reusable plastic bags starting January 2026.
- Ensure your receipts separately list the bag charge as required by law.
- Train staff to avoid charging exempt customers, such as those using EBT or WIC cards.
- Review your sales tax reporting to ensure the bag fees are properly included.
How TaxValet Simplifies Compliance with Changing Tax Laws
At TaxValet, we take the complexity out of sales tax compliance so you don’t have to worry about tracking every fee change. If you were a client, we’d ensure your systems are updated before this rule takes effect, help classify and report the fee correctly, and make sure you’re always audit-ready.
Need help staying compliant? Reach out to TaxValet for a free consultation and see how we can simplify your sales tax responsibilities.