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Use tax notice and reporting penalties
Use tax notice and reporting requirements are eliminated as of July 1, 2019. The following information applies from Jan. 1, 2018 to June 30, 2019.
Businesses doing notice and reporting will not be required to submit a report to the department or to consumers for sales made between Jan. 1, 2019 and June 30, 2019. Platform notices can be removed on July 1, 2019.
Threshold periods
Jan. 1, 2018 - Sept. 30, 2018: applies to all sellers who had $10,000 or more in retail sales to Washington customers.
Oct. 1, 2018 - June 30, 2019: applies to sellers with less than 200 transactions, and $10,000 to $100,000 in retail sales to Washington customers.
Penalty information
The following information applies to all penalties listed on this page.
- These penalties are cumulative.
- Each penalty can only be applied once per year.
- The department has the authority to estimate the penalties.
- Interest will accrue until the penalty amount is paid in full.
- There is a four-year statute of limitations on the imposition of these penalties.
- The department must notify a taxpayer by mail, or electronically, of any penalties and interest due.
- Amounts due must be paid within 30 days from the date of the notice.
Marketplace facilitators and remote sellers
Prior to July 1, 2019 if you failed to post the required conspicuous notice to Washington purchasers on your website, platform, catalog, etc. or failed to provide notice to customers at the time of sale the penalty is $20,000 (RCW 82.13.030(1)).
Annual report to customers
If you failed to provide customers the required 2018 annual report of purchases made, a tiered penalty structure applies (RCW 82.13.030(2)(a)). Your gross receipts include the marketplace facilitator’s gross receipts from direct sales and gross receipts from sellers selling through the facilitator’s marketplace.
| Yearly gross receipts to WA | Penalty amount |
|---|---|
|
$49,999.99 and below |
$5,000 |
|
$50,000 - $149,999.99 |
$10,000 |
|
$150,000 - $299,999.99 |
$50,000 |
|
$300,000 and above |
$100,000 + $20,000 per $50,000 of additional gross receipts |
Annual report to the Department
If you failed to provide the required 2018 annual customer report for sales to the Department of Revenue, including the required affidavit, the penalty is $25 for each consumer that should have been included in the report with a minimum of $20,000 (RCW 82.13.030(3)).
Example: In 2018, an out-of-state business has $500,000 gross retail sales in Washington to 10,000 customers. The business is not collecting and sending in sales tax or doing use tax notice and reporting. The business will owe the following penalties.
|
Failure to post both platform and invoice notice |
$20,000 |
|
Failure to provide annual report to customers |
$180,000 |
|
Failure to provide annual report to DOR |
$250,000 |
|
Total penalty due |
$450,000 |
Questions
Call 360-704-5900 or email DORMarketplaceFairness@dor.wa.gov.
