WA Dept. of Revenue Update: New Remote Seller Regulation

by Victoria Bartow | October 2, 2018

This week the Washington Department of Revenue will require some out-of-state businesses (remote sellers) to collect sales tax. A remote seller who, during the current or previous year, has at least $100,000 in retail sales to Washington consumers or at least 200 separate transactions with Washington consumers is required to collect and remit sales taxes.

The Wayfair decision issued by the Supreme Court has changed the landscape for online sellers. Before Wayfair, states could tax sales by businesses with a physical presence in the state through their office location or employees. The Supreme Court expanded the required nexus to include economic factors in addition to physical ones. In other words, economic transactions can create nexus in addition to physical presence. Another way to think about is that virtual presence, through the internet, can create nexus.

Note that remote sellers that sell to Washington consumers already must comply with the Marketplace Fairness Law which requires either 1) registering the business and collecting and emitting sales tax OR 2) following the use tax notice and reporting requirements. For those remote sellers who meet the threshold requirements above, the new rules effectively remove choice number 2 – it must register and collect sales tax on those sales.