Registering a Domain Name? Washington Sales Tax May Apply
- May 12, 2015 | Gail Cole
In Washington State, domain name registration services are considered to be sales of digital automated services. As such, they are generally subject to Washington retail sales or use tax.
State law defines digital products as both digital goods and digital automated services:
"Electronically transferred" or "transferred electronically" means obtained by the purchaser by means other than tangible storage media. It is not necessary that a copy of the product be physically transferred to the purchaser. So long as the purchaser may access the product, it will be considered to have been electronically transferred to the purchaser.”
Furthermore, Washington law considers a “sale at retail” to include the following sales to consumers of digital goods, digital codes, and digital automated services:
- “Sales in which the seller has granted the purchaser the right of permanent use;
- Sales in which the seller has granted the purchaser a right of use that is less than permanent;
- Sales in which the purchaser is not obligated to make continued payment as a condition of the sale; and
- Sales in which the purchaser is obligated to make continued payment as a condition of the sale.”
Therefore, internet domain name registration services are generally a taxable service in Washington.
Sales tax is complicated, particularly whenever digital goods and services are involved. An automated solution helps simplify it. Learn more.