Author Topic: Washington State Residents  (Read 6047 times)

gordontaylor

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Washington State Residents
« on: May 11, 2014, 05:19:46 AM »
For those working from Washington State, you are now required to collect sales tax for every state that has one that you are shipping too! It's very complicated and at the end of this article is a link to the Washington State Tax folks.

For example, you make a sale to someone in New York you will be required to collect sales tax for NY, pay it to Washington State and they will reimburse NY for the sale.

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If the sales tax collection method used results in the over- or under-collecting of tax, sellers are still required to remit all tax to the Department of Revenue, or if requested, refund the over-collected tax to the customer.

WA State Destination-based Sales Tax

Intended for Washington State based merchants who are required to charge and pay taxes under the specific tax rules in that state.

...

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Information on transitioning to Destination-based Sales Tax for Online Sellers using Shopping Carts
The Department of Revenue recognizes that sellers using online shopping carts face unique challenges to change to destination-based sales tax. Some shopping carts have limited capabilities in calculating sales tax.

With this issue in mind, the Department of Revenue has developed a number of tax rate tools to help businesses with this change. These tools include the Washington Sales Tax Rate Library (WSRL) source code that provides a sales tax rate lookup using the Department of Revenue's address and rate download files. Its purpose is to provide a look up tool for tax rates using their web service.

Shopping cart software like 3dcart have developed custom web applications for the rate lookup service thats directly into your Online Store.

The WA State Department of Revenue’s expectation is that sellers will do their best to determine the correct tax rates to collect and to report the sales to the correct jurisdictions when filing their tax returns. If the sales tax collection method used results in the over- or under-collecting of tax, sellers are still required to remit all tax to the Department of Revenue, or if requested, refund the over-collected tax to the customer.
http://dor.wa.gov/

Their definition of who will be required to collect this tax.
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Assistance for Small Businesses
Please note, small businesses that incur costs in changing to a destination-based system may qualify for up to $1,000 in tax credits to help offset these costs. Alternatively, they may qualify to receive up to two years of subsidized CSP service. To qualify, a business must have less than $500,000 gross income from Washington sales in 2008, at least 5% of taxable sales income from deliveries, and at least 1% of taxable sales income from deliveries outside the primary taxing jurisdiction.

This is going to require someone to build an extension real quickly for our Washington State users, the rate differences within a single state alone are enough to blow your mind!

Offline denagpam

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Re: Washington State Residents
« Reply #1 on: May 11, 2014, 10:14:03 AM »
hmm nice and great info Sir

thanks

Online llegrand

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Re: Washington State Residents
« Reply #2 on: May 11, 2014, 11:15:14 AM »
Hey Gordon,  what's the source of your information?  In particular your note about NY taxes and how to remit? 

The information I have does not support that:

Washington State is a destination sales tax ruling that has been in place since 2008  BUT it effects only WA based retailers shipping to destinations within WA state.  You can confirm this here:
http://dor.wa.gov/Content/FindTaxesAndRates/RetailSalesTax/DestinationBased/MoreSST.aspx

NY has a different set of rules -  they want every shipment coming INTO NY from any place to collect sales tax based on the destination and remit it directly to NY.  They also want every seller to have a sale tax license.   This is an unenforceable rule and will only be required of large businesses who sell enough to make recovery profitable to the state

This is further compounded in that  WA is part of the Streamlined Sales Tax program,  NY is NOT.  By not being part of the SST pact, NY requires direct remittance at this time.
You can confirm who is and who is not here:
http://www.streamlinedsalestax.org/


I applaud your intent to keep us up on important issues,  but correctness is also an important part of information.

Lee

gordontaylor

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Re: Washington State Residents
« Reply #3 on: May 11, 2014, 06:43:45 PM »
I read an article on it and that is the link it gave. I didn't search any further. All the article said was if you are based in Washington State and ship to other states that have sales tax, Washington requires you to collect the tax.

There are several commercial carts that have an extension for it as well.

 

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