On October 17, 2018, the Washington State Department of Revenue (DOR) issued interim guidance regarding the taxability of unredeemed gift cards in Washington state.  Under the Uniform Unclaimed Property Act, gift cards are presumed abandoned if not redeemed after three (3) years. According to DOR’s interim guidance, businesses have the option to report gift cards deemed abandoned to the DOR as unclaimed property or recognize the abandoned gift card as revenue or “breakage income,” which is considered taxable income for business and occupation (B&O) under the Service and Other Activities tax classification.

The DOR is continuing to review the issue, including calculating and determining the timing of recognition. DOR is seeking feedback from stakeholders regarding the matter and plans to conduct a stakeholder meeting to solicit information on the practicality of application.

Interim guidance provided by the DOR may be viewed at:


For more information or assistance with unclaimed property, please contact Sonjia Barker, CPA, State and Local Tax Senior Manager.

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