Washington sales tax for online sellers: nexus, permit and filing

What is the Washington sales tax rate?

The state rate is 6.5%. Cities, counties and transit districts add local taxes, so combined rates vary by delivery address and exceed 10% in parts of the Seattle area. Washington is destination-based: the rate is the one where the customer receives the goods.

When does an online seller have to collect in Washington?

You must register and collect if you have a physical presence in Washington, or if your gross receipts from Washington were more than $100,000 in the current or previous calendar year. There is no transaction count test. Gross receipts for this purpose include sales through marketplaces.

How nexus works in general is covered in physical vs economic nexus and economic nexus explained.

What if you sell on Amazon, eBay or Etsy?

Washington requires marketplace facilitators to collect and remit sales tax on the sales they facilitate, so you do not collect on those orders. Your own website and other direct channels remain your responsibility. See marketplace facilitator laws.

How do you register?

Register with the Washington Department of Revenue by submitting a business license application, which sets up your tax account. Out-of-state sellers register the same way. See how to form an LLC in Washington for Washington-based businesses.

What are the steps once you have nexus?

1. Confirm nexus

   Check your presence and your sales into Washington against its threshold.

2. Register before collecting

   With the Washington tax agency, as set out above.

3. Set up your store

   Charge the correct combined rate for each delivery address and product.

4. File and pay

   On the schedule Washington assigns, including zero returns where required.

How are returns filed?

Washington uses one combined excise tax return for retail sales tax and business and occupation tax, filed online through My DOR monthly, quarterly or yearly as the department assigns. Sales are reported by location code, since local rates vary.

See how to file a sales tax return.

What is the business and occupation tax?

A tax on the seller's own gross receipts from Washington, at a rate that depends on the activity, such as retailing or wholesaling. It is not charged to customers and has no deduction for costs. The same $100,000 threshold creates nexus for it, and small-business credits reduce or remove it at low levels of revenue. Marketplace sellers can owe it on their Washington sales even though the marketplace collects the sales tax.

What else should sellers know?

• Sellers outside the US: the same rules apply wherever the business is based. See selling on Amazon US as a non-resident.
• Late registration: tax you should have collected becomes your own debt. See voluntary disclosure agreements and collected but not remitted.
• Records: keep sales by delivery address, tax collected and any certificates. See exemption certificates and sales tax audits.
• Stopping: returns stay due until the account is closed. See filing frequency and cancelling a sales tax permit.
• Store settings: switch on collection only once you are registered. See Shopify sales tax setup.

This guide is general information. It is not tax or legal advice for your situation.