Washington Sales Tax Rates

Total Range for 2024

6.5%–10.4%

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Why do you need to collect sales tax in Washington?

If you’re selling goods and services in Washington then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.

Two types of nexus exist:

  1. Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Washington, triggers this type. If you do, you likely need to collect sales tax.
  2. Economic Nexus: This kicks in when your sales within Washington exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.

Is what you’re selling taxable in Washington?

Now that you understand the basics of Washington’s sales tax and nexus thresholds, let’s delve into whether your specific products or services are taxable.

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How to register for sales tax in Washington

In Washington, registering for sales tax doesn’t involve a traditional permit. Instead, you’ll establish a tax reporting account that allows you to collect and remit sales tax. Here’s the process:

  1. Apply for a Business License:
    • Head to the Washington Department of Revenue (DOR) website.
    • Utilize the Business Licensing Wizard to apply for your business license.
  2. Create a My DOR Account:
    • After obtaining your business license, visit the Secure Access Washington (SAW) site.
    • Click “New User? Sign Up” to create your online profile.
    • Follow the prompts to set up your login credentials and complete multi-factor authentication.
  3. Register for Sales Tax:
    • Once logged into your My DOR account, select “Apply for or Update a Business License.”
    • The application will ask for your business details, including:
      • Business name, address and contact information
      • Federal Employer Identification Number (EIN)
      • Business start date (or projected start date)
      • Projected monthly sales and taxable sales
      • Products or services offered

How to collect sales tax in Washington

  1. Include Tax in Your Prices:

The simplest way is to factor the total tax rate into your advertised prices. This shows customers the final price they’ll pay upfront.

  1. Collect Tax at Checkout:

When a customer makes a purchase, collect the appropriate sales tax amount on top of the base price. You can use a point-of-sale system (POS) programmed with the correct tax rates, or manually calculate it if you have a small business.

  1. Keep Records:

It’s crucial to maintain accurate records of all your sales and the sales tax you collect. This includes details like date, customer information, itemized sales, and the amount of tax collected.

Example:

Selling a coffee in Seattle:

  • Coffee costs $3.
  • Seattle sales tax is 8.7%.
  • Sales tax: $3 x 8.7% = $0.26.
  • Cusotmer pays = $3.26.

FAQs

Do you have a physical nexus in Washington?

A business has a physical nexus in Washington if it has a physical presence that’s connected to establishing or maintaining a market in the state. Here are some activities that can establish physical nexus:

  • Having employees or representatives in Washington: This includes salespeople, installers, or anyone who solicits sales on your behalf.
  • Storing inventory in Washington: Owning or leasing a warehouse or storing products for sale within the state creates nexus.
  • Owning or leasing property in Washington: Having a physical office or retail space qualifies as physical nexus.
  • Regular deliveries using your own vehicles: Delivering goods directly to customers in Washington with your own trucks can establish nexus.
  • Providing services in Washington: If your business travels to Washington to perform services, it might create nexus.
Do you have an economic nexus in Washington?

Washington has a $100,000 economic nexus sales threshold. This considers your gross sales from the previous or current calendar year.

Washington has an alternative economic nexus based on property, payroll, or receipts, but it’s rarely used.  This applies if, in the preceding tax year, your business had:

  • More than $53,000 of property or payroll in Washington, OR
  • More than $267,000 of receipts from Washington, OR
  • At least 25% of your total property, payroll, or receipts in Washington.
What is use tax in Washington?

In Washington, unlike sales tax which is collected at the point of purchase, use tax applies to situations where you don’t pay sales tax on a good, but will eventually use it in Washington. It’s essentially your responsibility to report and pay the tax on these items.

The use tax rate is the same as the combined sales tax rate for your location in Washington where you’ll be using the item.

Do you need a seller/reseller permit?

In Washington, the concept of a traditional seller/reseller permit isn’t used. Instead, you’ll establish a tax reporting account to collect and remit sales tax. Here’s why:

  • Sales Tax Registration: Washington focuses on sales tax collection. When you register for a business license, you’ll also be registering for sales tax. This allows you to collect sales tax from your customers.
  • Reseller’s Exemption:  While there isn’t a separate permit, businesses that buy goods for resale can obtain a resale certificate. This exempts them from paying sales tax on those purchases. You can typically get this certificate when registering for sales tax.
How to get a sales tax permit/license in Washington?

Washington doesn’t use a sales tax permit. Instead, register for a business license which automatically sets you up for sales tax collection. You can do this online through the WA Department of Revenue website.

When are Washington's Returns Due?

Washington state’s sales tax return due dates depend on your filing frequency, which is assigned based on your sales volume:

  • Monthly Filers: Returns are due on the 25th of the following month. (Example: June sales tax return due July 25th)
  • Quarterly Filers: Returns are due on the last day of the month following the tax quarter. (Quarters: Jan-Mar, Apr-Jun, Jul-Sep, Oct-Dec)
  • Annual Filers: Returns are due by April 15th of the following year.
How to file sales tax in Washington
  1. Register for a My DOR Account: You’ll need this online account to file and manage your tax obligations. Create one through the Secure Access Washington (SAW) site after obtaining your business license.
  2. File Electronically: Washington encourages online filing through their My DOR portal. It’s the quickest and easiest way to submit your return and make any tax payments.
  3. Gather Information: Before filing, have your sales records, tax-exempt sales details, and any relevant payment methods ready.
  4. File Your Return: Log in to My DOR and access the section for filing sales tax returns. Follow the prompts to submit your sales data and any tax owed.
  5. Make Payment (if applicable): You can pay directly through My DOR using electronic funds transfer or a credit/debit card (fees apply).
Is anyone exempt from sales tax in Washington?

In Washington, there isn’t a blanket exemption for any specific category of people. However, there are exemptions for certain types of purchases and for some organizations:

  • Exempt Items: Washington exempts specific goods from sales tax, including groceries (excluding prepared food), prescription drugs, and certain manufacturing equipment.
  • Tax-Exempt Organizations: Government agencies, some non-profit organizations, and federally recognized tribes may be exempt from paying sales tax on qualifying purchases. These organizations typically need a resale certificate to validate their exemption.

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