Consumers buying from out-of-state sellers

Many out-of-state sellers are now required to collect sales tax in states where they conduct business.

Washington sales tax collection requirements

Out-of-state sellers without a physical presence in Washington who make more than $100,000 in gross sales to customers in the state are required to collect and report sales tax.

If the $100,000 gross sales threshold is not exceeded, the out-of-state seller without a physical presence does not have to collect and report sales tax.

What if the out-of-state seller does not collect sales tax?

If the seller does not collect sales tax, you (the purchaser) may owe use tax. This is not an additional tax. Use tax is a tax on the use of goods and certain services in Washington when sales tax has not been paid. Goods used in this state are subject to either sales or use tax, but not both on the same transaction. Use tax is the same rate as sales tax.

Watch our  What is use tax? video (02:04) to learn more.

What amount is subject to use tax?

Use tax is determined on the value of the goods or services sourced to Washington. Generally, this is the purchase price of the product(s) including any freight, delivery, or shipping charges paid to the seller, even if amounts are separately stated on the receipt or invoice.

How to pay use tax?

You can pay use tax due by:

• My DOR: Our secure online application guides you through simple filing steps and gives you several payment options.
• Printing and mailing the Consumer Use Tax Return (PDF) along with a check.

The tax rate and location code are generally based on your home or business address. Use our Tax Rate Lookup Tool (online) or Tax Rate Lookup App (mobile) to find the tax rate and location code for your address.

Note: Businesses are required to report use tax for business-related purchases on their excise tax return.

References

RCW 82.12.020 – Use tax imposed.

WAC 458-20-178 – Use tax and the use of tangible personal property.