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Learn about tools and other destination-based sales tax information


With passage of Substitute Senate Bill 5089 (“Streamlined Sales Tax”), Washington changed from an origin-based system for local retail sales tax to a destination-based system effective July 1, 2008.

What is Destination-based Sales Tax?

Previously, Washington retailers collected local sales tax based on the jurisdiction from which a product was shipped or delivered - the "origin" of the sale. Presently, they must collect based on the destination of the shipment or delivery - the "destination" of the sale. This only affects shipments and deliveries to locations within Washington State.

Who is affected?

Destination-based sales tax applies only to businesses that ship or deliver the goods they sell to locations within Washington. Under the new rules, if a retailer delivers or ships merchandise to a buyer in Washington State, the sales tax is collected based on the rate at the location where the buyer receives or takes possession of the merchandise.

There is no change for deliveries outside the state or over-the-counter sales where customers take home goods from the store location.

Who is not affected?

If you do not ship or deliver, nothing changes about the way you handle sales tax.

For example, if a buyer receives merchandise at your retail business location, sales tax continues to be based on that location – the “origin” of the sale.

Additionally, this change does not affect:

  • Deliveries to locations outside the state of Washington
  • Wholesale sales
  • Services
  • Sales of motor vehicles, trailers, semi-trailers, aircraft, and watercraft. Sales tax will continue to be based on the seller’s location even if the seller delivers the items to customers.
  • Towing companies

Is help available?

To help retailers transition to destination-based sales tax, the state Department of Revenue provides web resources, tutorials, and other assistance. In addition, after July 1, 2008, certain small retailers are eligible for up to a $1,000 tax credit (to offset any necessary changes to their accounting, point-of-sale, or other systems) or two years of assistance from a certified service provider (CSP) – a third party that handles the coding and files the sales tax returns for businesses. The credit will be available on the excise tax return, beginning with the July 2008 return.

Learn more about the tax credit/Certified Service Provider assistance.



Examples of how destination-based sales tax works

How will the Department of Revenue communicate with businesses about the destination-based sales tax changes?

  • This web site will be the primary source of comprehensive details about the July 1, 2008, change to destination–based sales tax. We will update these pages as new information and materials are available. If your business is affected by the sales tax changes, bookmark this page and check back often.
  • Direct communication has been sent through our normal means, including the semi-annual “Tax Facts” newsletter, Special Notices, and targeted direct mailings.
  • If you are interested in having someone speak to your group or organization, contact our Speaker Coordinator.
  • Contact us with questions or concerns.

Why were these changes made?

The legislation signed by Governor Gregoire allows Washington to petition for membership in the national Streamlined Sales and Use Tax Agreement (SSUTA). It is an important step toward encouraging out-of-state sellers to collect sales tax on sales to Washington customers. In this way, SSUTA helps level the playing field for Washington’s “brick and mortar” businesses.

Learn more in our Streamlined Sales and Use Tax Agreement questions and answers.

Do I have to sign up for SSUTA?

No. Registration in the SSUTA by individual retail businesses is entirely voluntary. There are certain benefits for retail businesses who register with the SSUTA, but you do not have to join.

Destination-based sales tax is part of our state tax code.

This is true whether or not you register your business with the SSUTA.