If you’re a Washington state business and you ship/deliver goods within Washington state, you need to collect sales tax based on the destination starting in July 2008. This is very different from the current way we do it, which is based on whether the business is based in Washington. It’s quite confusing, and I don’t have it all sorted out, but will be updating this article as I learn more.
Here are the official links from the WA Dept of Revenue:
And the DOR email contact form if you have questions.
But look at this…an ONLINE RETAILERS SURVEY…if you have an online store..please take this (I took it and submitted my own opinion)
And some unofficial online discussions:
Lots of folks are worried about how to implement this way of calculating taxes in their online stores. Currently most of the online stores I’m familiar with do not support this kind of tax calculation. I founds lots of speculation, nothing that came directly from the WA DOR.
So I decided to contact the Washington State Department of Revenue and ask for myself.
Here’s what I sent:
I do website design, and have several clients who operate online stores. Currently, all the online store applications I’m familiar with calculate tax based on settings inside the online store application that determine the customer’s state.
For online stores in WA, this is typically set to 9%. In order to comply with the June requirement (and just to clarify, this is not voluntary, right?) all online stores in WA that ship to WA, now need to determine which location code the customer is in, to properly charge the right amount for sales tax.
I’ve seen nothing on your website regarding online store database integration – meaning, that DOR would maintain a database that, in real time, my online store would connect to to determine, again, in real time, what the appropriate tax rate to charge a particular customer.
This would be similar to how online stores calculate shipping costs, on the fly, by connecting to USPS, or FedEx or UPS. I would assume that DOR would be the same way – because it’s not possible to have an online store with someone sitting around manually looking up these codes.
I received this on April 04, 2008 from “DOR Streamlined Sales Tax”:
The Department is considering providing a web service that would allow online sellers to connect to in order to determine the appropriate tax rate for their buyer’s address. However, we have run into concerns with that approach.
In the meantime, we ask that sellers do what they can to collect the Washington sales tax.
If they have no control over the settings and they can only use the one rate, then we ask that they adjust, after the fact, for purchasers that request a refund of overpaid sales tax.
Of course, they would also adjust their reporting to reflect actual collections and refunds or credits.
Please write again if you have any questions.
So the Washington State Department of Revenue gave me a nice speedy response to my question, and I recommend that if you have questions, you email them as well.
I received a voicemail from the Washington State Department of Revenue – and you simply have to be really impressed with their customer service – telling me that the response they emailed to me should be considered a work in progress. They said that they would be sending me a more complete response in a few weeks, and I’ll post it here as soon as I get it. They are actively working on a more formal solution for us online business owners, and we need to just sit tight and see what they come up with.Jill
Aldebaran Web Design, Seattle
Jill Olkoski has a BS in Engineering, a BS in Computer Science and an MA in Clinical Psychology. She delights in using her advanced technical and psychological skills to help small business owners develop cost-effective and successful websites.