Effective Sept. 1, 2015, the State of Washington has adopted a “click-through” presumption of nexus standard for both retailing B&O tax and retail sales tax purposes. Under these provisions, out-of-state retailers are presumed to have physical nexus with this state if they:
- enter into agreements with Washington residents and pay a commission or other consideration for referrals (such as linking on a website), and
- gross more than $10,000 in sales into Washington state during the prior calendar year under this type of agreement.
The definition of “Washington resident” includes, but is not limited to, business entities physically located in this state and individuals maintaining a residence in this state. In addition to online or other referral arrangements, an out-of-state retailer may engage in other activities in this state through a resident or nonresident agent or other representative that establish nexus with this state. For additional information, please see the Out-of-state businesses guide page.
Register your business
Businesses with nexus in Washington State are required to register, collect sales tax and pay B&O tax.
A business may rebut the presumption of click-through nexus by showing that (i) each in-state person with whom the remote seller has an agreement is prohibited from engaging in solicitation activities in this state that refer potential customers to the remote seller, and (ii) such in-state person or persons have complied with that prohibition. The presumption of click-through nexus may also be rebutted by any other means as may be approved by the department.
Request a tax ruling
If you are unsure of your tax reporting and payment requirements, you may submit a written request to the Department for a tax ruling.
Submit a Voluntary Disclosure application
If you are concerned that you should have been registered and paying tax for prior periods, you may take advantage of the state’s Voluntary Disclosure Program.
Read the entire law.
If you have questions email us at Rulings@dor.wa.gov.