Retailers who make sales to Washington customers may be required to collect sales tax in the state. Determining nexus and then figuring out Washington sales tax rates can be complicated. This guide will help determine whether you are on the hook for Washington sales tax.
Washington sales tax rates vary by location. There is a state sales tax as well as various local rates.
Washington (WA) Sales Tax Rate: 6.5%
Maximum rate for local municipalities: 10.6%
Washington is one of the more complicated states for determining sales tax. This is due to the way Washington defines tax boundaries and the multiple rates within the state. In addition to the 6.5% state sales tax, there is also a county tax in most counties and some municipal sales taxes. Washington uses destination-based sourcing rules, meaning that for orders shipped to a customer’s home, the rate is determined by the customer’s address.
Having nexus within a state means that a retailer becomes responsible for collecting and remitting that state’s sales taxes.
There are several activities that cause a business to have a Washington state sales tax nexus. The most obvious and well-known is, of course, having an office or place of business within the state. However, other business activities may not be as obvious. These can include, but are not limited to:
Retailers who operate an affiliate program previously had nexus in Washington if they paid affiliates a commission and if they made $10,000 or more in gross retail sales into the state of Washington under the agreement during the previous calendar year. This is known as a click-through nexus, and it no longer applies.
Sellers should also be aware of a provision known as trailing nexus. This says that a retailer who had nexus but stops the business activity that created the nexus, is still considered to have nexus for the remainder of that year, as well as one additional calendar year after.
In addition to the above nexus definitions, Washington passed a new economic nexus law that went into effect in January 2020. Tax compliance requires that any corporation or small business with a physical presence in the state or that has more than $100,000 in combined gross retail sales within the state must collect and remit sales taxes on the state’s behalf.
Washington businesses are required to apply for a license if they:
Also taxable are some services within the state, including construction, recreation, and personal services such as tattooing. There is a select list of other taxable services as well, including but not limited to car washing, equipment rental, title insurance, and catering. It is recommended that you review the full list of taxable services on the Washington Department of Revenue website for full tax compliance.
Applying for a business license can be done online, by mail, or in person at any business licensing office.
Check out the Department of Revenue’s site for:
Sales tax returns can be filed electronically online, or by completing a paper return and sending it in by mail. Information about filing your sales tax return can be found here. Make sure of the rules that apply to you, however, as most businesses are required to file online. The Washington Department of Revenue accepts payment online via EFT (electronic funds transfer), eCheck, and credit card.
If you have no business activity within a given period, you may file such online, by phone or by mail. Details for filing no business activity can be found here.
Washington requires corporations and small businesses to file and pay sales taxes either monthly, quarterly, or annually. Your business’s estimated yearly income determines the frequency with which you must file. Your designation can be found in the packet provided when you registered to collect sales taxes for Washington state.
Monthly tax returns are due on the 25th of the following month.
If the due date falls on a weekend or a legal holiday, it is extended to the following business day.
Quarterly tax returns are due the end of the month following the tax quarter. For example, Quarter 1 taxes are due April 30th.
|January – March (Q1)||April 30|
|April – June (Q2)||July 31|
|July – September (Q3)||October 31|
|October – December (Q4)||January 31|
Annual sales tax returns are due January 31st.
If any of the due dates fall on a weekend or legal holiday, the new due date is the following business day. Here is a list of Washington’s state holidays.
A sales tax return amendment may be filed electronically or by paper. The state also allows taxpayers to provide a schedule of amended figures if multiple periods of a year or more need to be amended. Find more information about amending your return here.
The penalty for filing a late sales tax return in Washington is
The minimum penalty is $5. Waivers may be granted in certain cases.
The state of Washington also charges interest. Interest rates vary by year, and can be found on the Washington Department of Revenue’s website at this location.
Washington collects destination-based sales tax, that is, local sales tax based on the destination of shipment or delivery within the state by businesses. This was changed on July 1, 2008; prior to that, Washington was an origin-based state. There is no sales tax charge for deliveries outside the state.
AccurateTax’s TaxTools products completely handle all aspects of Washington’s sales tax rate lookup and calculation for all destinations within the state of Washington, and all special tax classes such as prepared food. Configuring sales tax on your ecommerce store has never been easier. Contact us for more information or register for a free trial of the TaxTools software.
You can also use our free sales tax calculator to look up the rate for any address in the state of Washington.
Last updated May 2022