Remote sellers doing business in Washington will be subject to an economic presence test for sales tax as of October 1, 2018.
In light of the U.S. Supreme Court’s decision in South Dakota v. Wayfair, the Washington Department of Revenue has updated sales tax guidelines for remote sellers.
Economic Presence Thresholds
Washington require remote businesses to collect sales tax beginning October 1, 2018, if the remote business has at least:
- $100,000 in gross retail sales or
- 200 retail transactions in Washington.
The requirement applies when the sales/economic thresholds are met in the current or prior calendar year.
As of January 1, 2018, remote sellers and marketplace facilitators with $10,000 or more in retail sales to Washington consumers have a choice to register and collect sales tax or follow certain use tax notice and reporting requirements. However, once a business exceeds $100,000 in retail sales or 200 transactions, as of October 1, 2018, it no longer has a choice and must collect and remit sales tax.
Additional information on Wayfair’s impact on Washington’s Marketplace Fairness Act can be found on the department’s website at https://dor.wa.gov/find-taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field/wayfairs-impact-marketplace-fairness-act-and-requirement-make-retail-sales-tax-choice.
Marketplace Fairness-Leveling the Playing Field, Washington Department of Revenue, August 6, 2018, ¶204-394