Effective Date: October 1, 2018
Threshold: $100,000 in annual gross retail sales *NOTE: October 1, 2018 through December 31, 2019, sellers with 200 or more separate transactions into Washington must collect. However, effective March 14, 2019 the threshold will only be $100,000. The state removed the 200 transactions threshold.
Measurement Date: Current or preceding calendar year
Includable Transactions: Retail sales; Marketplace sales included towards the threshold for individual sellers
When You Need to Register Once You Exceed the Threshold: The first day of the month that starts at least 30 days after you meet the threshold
On August 3, 2018, the Washington Department of Revenue issued guidance for remote sellers after taking time to review the U.S. Supreme Court’s South Dakota v. Wayfair decision. Beginning October 1, 2018, remote sellers and marketplace facilitators that have $100,000 in annual gross retail sales to, or 200 annual transactions with Washington consumers in the current or prior calendar year must register with the state and collect and remit retail sales/use tax on all taxable sales. The Department will apply this remote seller retail sales tax collection requirement prospectively only. No specific legislation was enacted to enforce this collection. Retail sales tax applies to all sellers unless otherwise prohibited under the Constitution or laws of the United States. With the Supreme Court decision, this appears to allow Washington to enforce collection without any additional legislation.
Washington has a second economic threshold for sellers that do not meet the $100,000/200 transactions nexus standard that is part of their Marketplace Fairness law and has been in effect since January 1, 2018. The law requires that remote sellers and marketplace facilitators making $10,000 or more in retail sales to Washington consumers must either register and collect/remit sales/use tax on their sales or follow use tax notice and reporting requirements. For more information see our prior tip. The state will enforce the penalties for noncompliance and expect sellers that register based on this new economic nexus provision to still issue the annual notices in early 2019 per the legislation. Taxpayers can apply for penalty waiver. It’s important to note that once a seller exceeds $100,000 in retail sales or 200 transactions, the seller no longer has a choice and must register and collect. For more information, you can visit the Washington Department of Revenue Marketplace Fairness page. (News Release, Washington Department of Revenue, August 3, 2018).
UPDATE: On March 14, 2019, the Washington Governor signed S.B. 5581, which removes the 200 transaction threshold for remote sellers. The threshold will only be $100,000 going forward. However, for prior periods October 1, 2018 through December 31, 2019, sellers with 200 or more separate transactions into Washington must collect.