Have you ever made a retail purchase and the invoice didn’t include retail sales tax? This may occasionally occur, especially if you purchase items over the internet or from out-of-state vendors. Washington sellers have a responsibility to collect retail sales tax. However, the buyer has a responsibility to pay use tax to the Department of Revenue even if the seller doesn’t collect it. This article discusses what to do when you receive invoices without retail sales tax from an in-state or out-of-state vendor.
Invoices from in-state vendors
The first thing to do if you receive an invoice on a retail purchase from an in-state business that does not include retail sales tax is to contact the vendor and ask why. Ask the vendor to issue a new invoice that itemizes the amount of sales tax due. Doing so ensures that both you and the seller understand the amount is for retail sales tax.
If you cannot contact the vendor or they will not issue a new invoice, you can pay the tax directly to the Department of Revenue using either a Consumer Use Tax Return (if you are not a registered business) or on the use tax lines of your Excise Tax Return. For record keeping purposes, you should make a note on the invoice when you pay sales tax in this manner.
Do not add the sales tax onto the bill yourself
Unless the seller’s invoice itemizes retail sales tax, there is no way to prove the tax was properly remitted to the Department. Unless the tax is separately itemized on the billing receipt or invoice, the vendor may credit the amount you intend for retail sales tax to something else.
Also, an invoice should never have a single figure that “includes retail sales tax.” If you receive such an invoice, contact the vendor and ask for a new invoice with the retail sales tax separately stated. Washington law requires that customer sales slips, contracts, invoices or other sales documents separately state the amount of retail sales tax due. See RCW 82.08.050 and WAC 458-20-107 for additional information.
Invoices from out-of-state vendors
If you know the out-of-state vendor has an in-state business presence, contact the vendor and ask why retail sales tax wasn’t charged. Depending on the response, you may want to ask them to send a new invoice that includes retail sales tax.
However, many out-of-state businesses have no business presence, or “nexus,” in Washington. Such businesses are not required to register with the Department of Revenue and are not required to charge retail sales tax to their Washington customers.
If you purchase goods from one of these businesses, you must pay use tax to the Department on the value of your purchases. You can pay use tax by using either a Consumer Use Tax Return (if you are not a registered business) or the use tax lines on your Excise Tax Return. Be sure to make a note on the invoice when you pay use tax in this manner.