Many of my readers may be familiar with a very popular article I wrote in May of 2008 about the then new Washington State Destination Based Sales Tax. Today I received news from one of my readers that alerted me to a new development: SB5113.

This new bill would ammend 82.32 RCW adding language that would seem to fix the problem that many of us who own online stores have – namely that we’re supposed to be charging tax based on the customer’s address, the “destination”.

Here’s the language:

NEW SECTION. Sec. 2. A new section is added to chapter 82.32 RCW

4 to read as follows:

5 (1) Retail sales of tangible personal property and digital goods

6 shall be sourced to the location where the order is received by the

7 seller if:

8 (a) The order is received in this state by the seller and where

9 receipt of the product by the purchaser or the purchaser’s donee occur

10 in this state. However, when products are sold in conjunction with a

11 retail service, both the product and the service must be sourced as

12 required in RCW 82.32.730;

13 (b) The location where receipt of the product by the purchaser

14 occurs is determined pursuant to RCW 82.32.730(1) (b) through (d); and

15 (c) At the time the order is received, the recordkeeping system of

16 the seller used to calculate the proper amount of tax to be imposed

17 captures the location where the order is received.

18 (2) For purposes of this section, the location where the order is

19 received by or on behalf of the seller means the physical location of

20 a seller or third party such as an established outlet, office location

21 or automated order receipt system operated by or on behalf of the

22 seller where an order is initially received by or on behalf of the

23 seller and not where the order may be subsequently accepted, completed

24 or fulfilled.

If you’re in Washington, contact your legislators to learn more about this bill and if indeed does get rid of the nearly impossible to implement “destination based sales tax”, help get this bill out of committee and up for a full vote. This would be a great improvement and make it much easier for online store owners.

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