What is Washington State Sales Tax?

As a business owner or entrepreneur in Washington, it can be challenging to know exactly what the sales tax rate is, how often to file, and which items are actually taxable.

The first step for any business owner in Washington is to determine if their business fits the criteria for being a “sales tax nexus.” To qualify for being a sales tax nexus, businesses essentially have to service a large audience, garner a sizeable amount of sales on taxable items, or simply have business dealings with the state itself (including state employees).

If your business fits the above criteria, the next step is to file for a permit to charge sales tax on items/services/etc.

The state sales tax rate you charge your customers varies based on whether your business is located inside or outside the state of Washington. According to Washington’s “destination based sales tax” rule, businesses are expected to charge customers the tax rate specific to their state.

More specifically, certain sellers on Amazon may need to be familiar with the state sales tax rate in Washington.

The sales tax rates vary slightly based on the exact location where sale items are being housed in the state of Washington.

So, which items or services are taxable? And, perhaps even more importantly, which aren’t? In the state of Washington, both tech savvy computer programmers and aspiring fashionistas are exempt from having to pay state sales tax. However, any business that is actually selling tangible goods is required by law to pay the appropriate states sales tax.

Once your business has taken the necessary steps and received a permit to charge state sales tax in Washington, filing these taxes is your next concern.

The frequency with which you will have to file is determined by the number of dollars your company collect in state sales tax. Filing frequency in the state of Washington is done on a monthly, quarterly, or yearly basis. For example, if your company collects more than $400.01 per month in sales tax revenue, your must file monthly. Any business collecting less than $87.50 per month is expected to file yearly.

The sales tax  for Seattle is different from the sales tax for Washington as a whole. The location code for Seattle is 1726 and the combined tax rate is 9.6%. Click here for a breakdown of where that money goes.

If you are a business owner in Seattle, WA and have questions about Seattle or Washington state sales tax contact us, or go to our blog for more information. You can also leave a comment and we’ll get back to you.