State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Washington (WA)

WA Sales Tax - Name of Tax and General Application:

Washington imposes a tax on retail sales in the state. This tax is referred to as a

WA Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Washington imposes nexus on an out-of-state vendor who systematically solicits sales using direct mail or who distributes catalogs, magazines, or newspaper advertisements in the state. Even one day of participation in a trade show to visit brokers and customers is deemed to create nexus. Also, a Washington court ruled in 2009 that 2-3 customer visits per year by three employees was enough activity to create nexus for business and occupation (B&O) tax even though the company had no other physical presence.

WA Local Tax - Do Localities Impose Tax?

Yes, Washington imposes local sales tax.

WA Resale Certificate Renewal Agreements:

Sales for resale are not taxable and are excluded from the taxable definition of "retail sale." An exemption certificate is required. Please note that Washington requires an exemption certificate at the time of purchase in order to exclude a resale sale from tax. The Department of Revenue has made it clear that taxpayers may not go back and get these certificates after the fact.

WA Resale Certificate Renewal Periods

Certificates are valid for four years from their issue. They must also be renewed any time the tax registration number of a business changes.

WA Statute of Limitations

Four years from the close of the tax year in which the liability arose. There is no limitation period if no return was filed.