Washington: Sales Tax Handbook
What constitutes sales tax nexus in Washington?
One of the more complicated aspects of Washington sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of Washington, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in Washington, the vendor must register for a Washington sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in Washington.
Sales Tax Nexus in Washington
According to Washington law, retailers who have tax nexus can be defined in several different ways. For instance, if your business solicits sales or assembles merchandise within the boundaries of this state through any representative or employee, you have tax nexus. In addition, if your business keeps a stock of merchandise within the state's boundaries, rents or leases a physical personal property, provides services, makes regular deliveries of merchandise into the state of Washington using the taxpayer's personal vehicles, or constructing, repairing, maintaining, or installing physical property within the states boundaries would have tax nexus.
If you make less than 12,000 a year, the state of Washington does not require you to obtain a sales tax permit or to collect sales tax from buyers.
For additional details on sales tax nexus law in Washington, see the nexus information page from the Department of Revenue at http://dor.wa.gov/content/DoingBusiness/BusinessTypes/doingBus_OutOfStBus.aspx#Nexus
Taxation of Internet-Based Sales in Washington
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Generally, Washington does not charge sales tax on Internet-based transactions determined to have nexus within the state. This means that purchases from Amazon.com and other Internet-based retailers may be sales-tax-free.
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within Washington, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in Washington?
The folks at the sales tax compliance company Avalara are an approved Washington sales tax partner, and you can use their free Washington nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay Washington sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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