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Helpful Hints for Reporting Sales and Use Tax

 

What code do I use for my local tax?

Goods and merchandise sales are coded to the location where the customer receives them.

  • Over the counter sales, where the customer receives the item at the retail location, are coded to the retail store or outlet.
  • Items that are shipped or delivered to the customer, either through the U.S. mail or a third party common carrier, are coded to customer’s ship-to address.

    Example: A customer from Gig Harbor orders goods to be delivered  from a store located in Tacoma., The store will code the sale to Gig Harbor.

Goods delivered into Washington

  • If goods are delivered into Washington from outside of the state the sale is coded to the location where the customer receives the goods. 

Installation and Construction

Businesses performing installation or construction services must use the location code where the service or installation takes place.

Example: A Bellevue store sells carpet to a Redmond customer and installs the carpet in the customer's Redmond home.  The sale is coded to the customer's Redmond address.

Lease or Rental of Tangible Personal Property

The payment is sourced depending on the following:

Single payment

  • If a single payment is made and the customer (lessee) picks up the equipment at the location of the business renting the equipment (lessor), then the lessor's location determines the code and sales tax rate.
  • If a single payment is made but the equipment is delivered to the customer at another location, the code is determined by the location where the customer receives the equipment.

    Example: A Spokane business rents a rototiller to a customer in Airway Heights for two days. The customer picks up the rototiller at the Spokane business and pays for the two days. The business will collect and code the local sales tax to Spokane. However, if the customer has the lessor deliver the rototiller to Airway Heights, the business will collect and code the local tax to Airway Heights.

Multiple payments

  • If the item is leased for a length of time and periodic payments are made, the first payment is coded to the location where the customer receives the equipment, normally the lessor's business location. All subsequent payments are coded to the location where the equipment is primarily used by the customer.

    Example: A person in Yakima enters into a 36-month vehicle lease with a Seattle leasing company. The person picks up the vehicle in Seattle then drives it to Yakima. The Seattle company will collect the sales tax rate for Seattle on the initial payment. All subsequent lease payments will be sourced to Yakima.

 

For help determing the correct location code and sales tax rate, use our Tax Rate Lookup Tool (GIS) or call 1-800-647-7706. 

 

Reporting Local Sales and Use Tax Rate Changes

(WAC 458-20-199; -235)

Occasionally the tax rate changes or, due to incorporation, an area changes their four-digit location codes in the middle of a reporting period.  If changes take place, the income before and after the change must be split on the Excise Tax Return between the old rate and the new rate, or the old location code and the new location code. Please note that local sales tax rates can only be changed quarterly.

 

Example: The city of Bellingham increased its tax rate effective April 1. For sales taking place in Bellingham before April 1, the local tax rate was .017.  Sales taking place on or after April 1 are taxed at .018.

Use Tax rate example 2

 

Example: The city of Spokane Valley incorporated as of April 1.. For sales taking place before April 1, the local tax is coded to 3200. Sales taking place on or after April 1 are coded to the new location code of 3213.

Use Tax rate example 2

 

If you have made a mistake on a past return, you must file an amended tax return.

 

 

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