Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

Can I collect sales tax from customers in different states without violating tax laws in Washington? What are the requirements?

Requirements for Collecting Sales Tax from Customers in Different States in Washington

If you are a remote seller, referrer, or marketplace facilitator, and you have a physical presence in Washington state or meet certain criteria, you must collect and remit retail sales or use tax on all taxable retail sales into the state pursuant to RCW 82.08.020, 82.12, and 82.32 [1.1]. However, until January 1, 2020, the requirement to collect and remit tax does not apply with respect to the retail sale of digital products and digital codes, other than specified digital products and digital games and digital codes used to redeem specified digital products and digital games, by a marketplace seller through a marketplace facilitator or directly resulting from a referral [1.1].

If you are a marketplace facilitator, the election to collect and remit retail sales or use tax applies only with respect to retail sales through the marketplace facilitator’s marketplace by or on behalf of marketplace sellers who do not have a physical presence in Washington state and the marketplace facilitator’s own retail sales, if the marketplace facilitator does not have a physical presence in Washington state [1.1].

If you are a referrer, the election to collect and remit retail sales or use tax applies only with respect to retail sales directly resulting from a referral of the purchaser to a marketplace seller who does not have a physical presence in Washington state and the referrer’s own retail sales, if the referrer does not have a physical presence in Washington state. A referrer may make different elections with respect to retail sales described in (c)(i)(A) and (B) of this subsection [1.1].

An election to collect retail sales or use tax is binding on the remote seller, referrer, or marketplace facilitator until January 1st of the calendar year that is at least twelve consecutive months after the remote seller, referrer, or marketplace facilitator began collecting retail sales or use tax under such election. A remote seller, referrer, or marketplace facilitator who has made an election under this subsection to collect retail sales or use tax may change its election and comply with RCW 82.13.020 by providing written notice to the department in a form and manner required by the department. Such an election change may take effect only on the first day of the calendar year that is at least thirty days following the date that the department received written notice from the remote seller, referrer, or marketplace facilitator of its change in election [1.1].

Exemptions

There are two exemptions that may apply to sales tax collection in Washington state:

  1. Sales for use in states, territories, and possessions of the United States which are not contiguous to any other state. The tax levied by RCW 82.08.020 shall not apply to sales for use in states, territories, and possessions of the United States which are not contiguous to any other state, but only when, as a necessary incident to the contract of sale, the seller delivers the subject matter of the sale to the purchaser or his or her designated agent at the usual receiving terminal of the carrier selected to transport the goods, under such circumstances that it is reasonably certain that the goods will be transported directly to a destination in such noncontiguous states, territories, and possessions [1.2].
  2. Sales of motor vehicles, trailers, or campers to nonresidents for use outside the state. The tax levied by RCW 82.08.020 does not apply to sales of motor vehicles, trailers, or campers to nonresidents of this state for use outside of this state, even when delivery is made within this state, but only if: (a) The motor vehicles, trailers, or campers will be taken from the point of delivery in this state directly to a point outside this state under the authority of a vehicle trip permit issued by the department of licensing pursuant to RCW 46.16A.320, or any agency of another state that has authority to issue similar permits; or (b) The motor vehicles, trailers, or campers will be registered and licensed immediately under the laws of the state of the buyer’s residence, will not be used in this state more than three months, and will not be required to be registered and licensed under the laws of this state [1.4].

Conclusion

If you are a remote seller, referrer, or marketplace facilitator, and you have a physical presence in Washington state or meet certain criteria, you must collect and remit retail sales or use tax on all taxable retail sales into the state pursuant to RCW 82.08.020, 82.12, and 82.32. However, there are exceptions for digital products and digital codes until January 1, 2020. If you are a marketplace facilitator or referrer, the election to collect and remit retail sales or use tax applies only with respect to certain retail sales. An election to collect retail sales or use tax is binding until January 1st of the calendar year that is at least twelve consecutive months after the remote seller, referrer, or marketplace facilitator began collecting retail sales or use tax under such election. Additionally, there are exemptions for sales for use in noncontiguous states, territories, and possessions of the United States and sales of motor vehicles, trailers, or campers to nonresidents for use outside the state.

Source(s):
Jurisdiction

Washington