RCW 82.08.020 broadly imposes retail sales tax on each retail sale in Washington. See also Chapter 82.12 RCW (compensating use tax statute). Under RCW 82.08.0254 and 82.12.055, Washington sales or use tax applies unless prohibited under the Constitution or laws of the United States.
RCW 82.08.053 requires remote sellers and marketplace facilitators with $10,000 in retail sales in Washington to elect to either collect and remit sales and use tax, or comply with the use tax notice and reporting requirements in chapter 82.13 RCW.
On June 21, 2018, the U.S. Supreme Court decided South Dakota v. Wayfair, Dkt. No. 17-494, 06/21/2018. In Wayfair, the U.S. Supreme Court upheld a South Dakota law that imposed a sales tax collection obligation on sellers with more than $100,000 in sales or 200 transactions annually in South Dakota. Prior to that decision, states could only impose a sales tax collection obligation on sellers with a physical presence in the state under federal law.
The Wayfair decision represents a change in federal law that permits states to impose greater sales and use tax collection obligations on sellers than was previously allowed. Pursuant to RCW 82.32.733, the Department has determined this change in federal law creates a conflict with the “collect or report” election provisions of RCW 82.08.053. Specifically, under federal law as applied in Wayfair, Washington can require remote sellers and marketplace facilitators that have $100,000 in sales or 200 transactions in the state to collect sales and use tax on those sales. To the extent the “collect or report” election provided in RCW 82.08.053 would limit this authority to require sales and use tax collection, the election provision conflicts with the change in federal law and will have no further force and effect.
Effective October 1, 2018, remote sellers and marketplace facilitators that have $100,000 of gross retail sales or 200 retail transactions in the state during the current or prior calendar year are required to collect and remit sales tax on all taxable retail sales in Washington according to RCW 82.08.020 and 82.08.050. Additionally, for those remote sellers and marketplace facilitators meeting these requirements, the provisions of RCW 82.08.053 that provide the option to collect or comply with the use tax notice and reporting requirements in chapter 82.13 RCW will have no further force and effect. This notification satisfies the requirements of RCW 82.32.733.
Sellers with a physical presence in Washington must continue to collect sales and use tax on retail sales in Washington as is currently required.