Washington Sales Tax Filing 2018 Update: Marketplace Facilitator Laws
Washington passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective January 1, 2018.
Amazon and eBay began this collection on January 1, 2018.
Walmart began collecting on February 6, 2018.
Etsy began collecting on January 1, 2018.
📣 Effective January 1, 2020: The nexus threshold for all B&O tax classifications and sales tax collection will be $100,000 of combined gross receipts per calendar year for businesses without a physical presence nexus. We provide more information here .
In this article, we summarize Washington state guidance on the following questions:
- Do I need to register for a sales tax license in Washington?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on Washington sales on non-marketplace platforms?
- Do I still need to file returns in Washington?
- How do I file without paying double tax on the sales that were collected and remitted by my Marketplace?
- How does this affect my responsibility for reporting and paying Washington’s Business & Occupation (B&O) tax?
I've never registered for a Washington license. Do I need to register for a sales tax license in Washington now?
If you are a retailer with a physical presence in Washington or you are a remote seller who has crossed the economic nexus threshold for Washington, then you will need to register for a Washington sales tax license.
- From Oct. 1, 2018 to March 13, 2019, businesses that had 200 transactions with Washington customers also met this threshold. On March 14, 2019 the 200 transaction criteria was eliminated.
- As of March 14, 2019, you are no longer required to collect retail sales tax unless you exceed the $100,000 threshold in the current or previous year, or you have a physical presence nexus in Washington.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
If you do not meet any of the criteria that create nexus in Washington (physical, economic or otherwise), you won't need to register for a sales tax license in this state.
I have already registered for a license in Washington and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
No. If you have nexus in Washington, you are still required to file sales tax returns and file & pay B&O tax by your assigned due date.
Do I need to collect taxes on my Washington sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in Washington on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Washington orders that are processed on the other platforms.
Do I still need to file returns in Washington?
Yes. Even if you only sell via a marketplace and the marketplace collects sales tax from all of your customers, you are required to file a Washington sales tax return.
- One thing that will change is that instead of breaking out your Washington local sales tax by city, county, etc. you will claim a deduction for the sales tax that Amazon (or another marketplace) collected on your behalf.
- This means you will still need to keep track of the sales tax that the marketplace collects on your behalf, though you will now take this amount as a deduction on your Washington return.
- You will most likely still need to file and pay your Washington Business & Occupation (B&O) tax.
I still need to file returns in Washington. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
When you file your Washington sales tax return, your WA TaxJar report does not list the amount of tax collected or show jurisdiction breakdowns of your Marketplace sales as it is not required by the state.
- Your WA TaxJar Report lists the Gross Sales from your marketplace (such as Amazon), and that is the total you see in the Marketplace Sales row of the Report.
- When you file, you'll report those Marketplace Sales on the "RST Collected by Facilitator" line under "Deductions" on your Washington sales tax filing.
- We have tips to help with the new WA filing method for Marketplace Facilitator sales here.
If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
- If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for Washington, our system will handle the Marketplace sales deduction process automatically.
How does this affect my responsibility for reporting and paying Washington’s Business & Occupation (B&O) tax?
Most marketplace sellers may be required to pay Washington’s Business & Occupation (B&O) tax even if you only sell on Amazon and are no longer required to collect sales tax from your customers.
These thresholds will apply to all Washington income, including retailing, wholesaling, service and other activities, and other apportionable activities.
The WA State DOR has more information here.
There is a rare exception and we discuss this more in-depth in our blog article here.
- We always recommend you contact the Washington Department of Revenue if you need specific advice regarding your particular business situation.