A remote seller’s in-state visits in Washington created substantial nexus for sales and use tax purposes in the state. A representative of the seller – who sells sports uniforms and equipment to customers – visited Washington two to three times a year for “sizing nights,” at which members of local sports teams or clubs could determine their correct uniform size. The representative did not take orders, solicit business, or make sales at these events. When the seller’s representative would visit a team for a sizing night, a decision has already been made to purchase uniforms from the seller.
Washington’s standard for determining whether nexus exists is whether an activity is “significantly associated with establishing or maintaining a market within this state.” The representative’s activity was of value to the seller and its customers. The “sizing nights” contributed to the seller’s ability to maintain a market for its products in Washington, thereby establishing nexus for the seller in Washington.
The seller argued that not all of its Washington sales should be taxed and that sales related to “sizing nights” should be disassociated from its other sales in the state. In response, the Washington Department of Revenue stated that “In general, nexus for one sale is nexus for all sales.” The seller failed to show a lack of connection between its nexus creating activities and the sales it seeks to dissociate. (Determination No. 17-0229, Washington Department of Revenue, February 1, 2019)