Lawmakers in Washington State are fed up with the lack of clarity provided by the federal government and the United States Supreme Court with respect to remote sales tax., which they believe has created "avoidable conflicts." As a result, legislators have taken matters into their own hands and created a new click-through nexus law. It takes effect September 1, 2015.
As explained in Senate Bill 6138, “the legislature intends to provide more clarity for out-of-state sellers that compensate Washington residents for referring customers to the out-of-state seller by providing clear statutory guidelines for determining when these out-of-state sellers are required to collect Washington’s retail sales tax.”
Clear guidelines
Clarity comes in a new section of chapter 82.08 RCW, “to be codified between RCW 82.08.050 and 82.08.054.” Under it, there is a rebuttable presumption that a remote seller has substantial nexus and an obligation to collect and remit sales and use tax if the following are true:
- “The remote seller enters into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an internet web site or otherwise, to the remote seller;” and
- “If the cumulative gross receipts from sales by the remote seller to customers in this state who are referred to the remote seller by all residents with this type of an agreement with the remote seller exceed $10,000 during the preceding calendar year.”
Remote seller, defined
A remote seller is defined as “a seller that makes retail sales in this state through one or more agreements described in subsection (1) of this section, and the seller’s other physical presence in this state, if any, is not sufficient to establish a retail sales or use tax collection obligation under the commerce clause of the United States Constitution.”
Therefore, beginning September 1, 2015, there is click-through nexus for both retail sales tax and retailing B&O tax in Washington. Additional information is available through the Washington State Department of Revenue.
More and more states are going after remote sales tax revenue; for example, certain Internet retailers will have to collect and remit Michigan sales tax beginning October 1, 2015. Businesses best prepared to meet that obligation in multiple states use automated sales tax Software-as-a-Service (SaaS). Learn how it works.
