Chimacum WA Sales Tax:
What Businesses Must Know

Sales tax range in Washington

In 2024, does Washington have a WA state sales tax still imposed on consumers purchasing goods and some services? The sales tax rates vary depending on the location within the state, as local jurisdictions add their taxes to the state base rate.

State Sales Tax: The state-imposed rate remains at 6.5%, unchanged from 2023.

Local Sales Tax: Local jurisdictions can add additional sales taxes, leading to variable rates across different areas. In Seattle, the combined sales tax rate stands at 10.25% in 2024, slightly up from 10.1% in 2023.

Tacoma: In Tacoma, the combined sales tax rate is now 10.3%, an increase from 10.2% in 2023 due to local adjustments.

Spokane: Spokane's rate is 8.9% in 2024, consistent with their rates from 2023.

Vancouver: The sales tax rate in Vancouver, Washington, is now 8.6%, up from 8.5% last year.

Other Areas: Various cities and counties exhibit rates ranging from 7.9% to 10.5%, with minor adjustments in some jurisdictions as local governments update their tax structures.

Calculating Washington sales tax

Identify the State Sales Tax Rate

The base Washington state sales tax rate is 6.5%, but whenever you need specific details, always ask about the state of WA sales tax to ensure accuracy.

In 2024, the sales tax in Seattle, WA stands at 10.25%, reflecting a slight increase from the previous year's rate of 10.1%. This incremental adjustment aims to align with the city's growing fiscal needs and supports various municipal initiatives, including public transport and social services.

Determine Local Sales Tax Rates

Local sales tax rates vary by location and can be found using the Washington Department of Revenue Tax Rate Lookup Tool.

E-commerce Sales Tax

Apply the combined state and local tax rate specific to the destination address within Washington. Washington follows a destination-based sourcing rule for e-commerce.

SaaS (Software as a Service) Sales Tax

SaaS products are subject to sales tax in Washington. Use the combined state and local tax rate for the service recipient's location.

For those curious about what is the sales tax in Washington for various services, it's worth noting that specific services like digital automated services are indeed taxable. However, most other services remain exempt from sales tax unless otherwise specified by the state regulations.

Services Sales Tax

Most services are exempt from sales tax in Washington. Exceptions include services like digital automated services, which are taxable.

Calculate Combined Tax Rate

Add the wa sales tax rate (6.5%) to the applicable local sales tax rate to get the total sales tax rate.

Compute the Sales Tax Amount

Multiply the transaction amount by the total Washington state sales tax rate. Example: For a total tax rate of 9%, a $100 sale would incur $9 in sales tax ($100 x 0.09).

Collecting Sales Tax

Retailers must collect the correct rate of sales tax at the point of sale, so always ensure you know what is the sales tax in Washington state.

Remitting Sales Tax

Sales tax collected must be reported and remitted to the Washington Department of Revenue, typically on a monthly or quarterly basis. For current rates, one might ask, 'what is sales tax in Washington state now?'

Special Considerations for Sellers

Marketplace facilitators must collect and remit sales tax on behalf of third-party sellers, in compliance with the tax code. Remote sellers meeting specific economic nexus thresholds must also collect and remit sales tax to Washington.

For detailed and current information regarding the sales tax in Seattle, WA, it is advisable to refer to the Washington Department of Revenue's online resources. Accurate tracking of these rates is crucial for both consumers and businesses to ensure proper compliance and financial planning.

Recent changes to Washington sales tax

In 2024, Washington state made notable adjustments to its sales tax rates, including the sales tax in Seattle, WA, which stands at 10.25%. In 2023, the statewide sales tax rate was 6.5%, digital goods had partial exemptions, and significant appliance exemptions were not in place. Local rates in Seattle and Spokane were 3.75% and 3.0%, respectively, and compliance measures were less stringent.

Statewide Sales Tax Increase

On April 1st, 2024, Washington increased its statewide sales tax rate from 6.5% to 6.7%. This 0.2% rise aims to support funding for public education and infrastructure projects.

Local Sales Tax Adjustments

Several local jurisdictions within Washington also modified their sales tax rates in 2024. For example, Seattle increased its local sales tax from 3.75% to 4.0%, effective January 1st, 2024. Conversely, Spokane reduced its local sales tax from 3.0% to 2.9%, effective March 1st, 2024.

Tax on Digital Goods

Beginning July 1st, 2024, Washington expanded its sales tax to cover additional digital goods and services, such as online streaming subscriptions and cloud storage, which were previously exempt or taxed at a lower rate. This change aligns the taxation of digital goods with tangible personal property.

Exemptions and Exemptions Removal

The state introduced new sales tax exemptions for energy-efficient appliances on January 1st, 2024. These items, including ENERGY STAR-rated refrigerators and washing machines, are now exempt from sales tax. At the same time, the exemption for non-educational periodicals was removed, and these items are now subject to sales tax starting February 1st, 2024.

Updated Compliance Measures

Enhanced enforcement and compliance measures were instituted on June 1st, 2024, to ensure accurate collection and remittance of sales tax. Businesses are now required to report sales taxes more frequently, shifting from quarterly to monthly filings.

Understanding origin vs. destination sales tax collection

Washington is a destination-based sales tax collection jurisdiction. This means that sales tax is calculated based on the location where the buyer takes possession of the item or service instead of the location of the seller. Washington's Department of Revenue clarifies that retailers are required to collect sales tax at the rate of the jurisdiction where the item is delivered.

Taxable products in Washington

Tangible Personal Property

General Merchandise: This includes most retail goods such as clothes, jewelry, electronics, furniture, and books.

Household Items: Appliances, kitchenware, and home décor are taxable.

Vehicles: Cars, motorcycles, RVs, and boats are subject to sales tax.

Electronics: Computers, smartphones, televisions, and other electronic devices.

Computers and Software: Both prewritten and custom software, as well as computer hardware.

Food and Beverages

Prepared Food: Meals bought at restaurants, fast food, and take-out orders are taxable.

Certain Groceries: While basic groceries are typically exempt, some items like soda, candy, and prepared foods are subject to sales tax.

Services

Labor and Repair Services: Services like car repairs, appliance repairs, and other types of labor on tangible personal property are taxed.

Digital Services: Streaming services, digital downloads of music, movies, and e-books.

Personal and Business Services: Services such as dry cleaning, pet grooming, and event planning may be subject to sales tax.

Utilities and Subscriptions

Telecommunications: Service plans for cell phones, internet subscription services, and cable TV.

Utilities: Electricity, natural gas, and water services are typically taxable.

Construction and Improvement

Construction Materials: Building supplies such as lumber, paint, plumbing fixtures, and hardware.

Home Improvement Services: Installation and repair services, including HVAC, roofing, and landscaping services.

Entertainment

Event Tickets: Concerts, sports events, and theater tickets.

Amusement Services: Entry to amusement parks, ski lifts, and other entertainment venues.

Motor Fuels

Gasoline and Diesel: Fuel for vehicles is subject to specific state-imposed taxes.

Miscellaneous

Luxury Goods: High-end items such as luxury cars, designer apparel, and fine jewelry.

Tobacco Products: Cigarettes, cigars, and other tobacco products.

Cannabis Products: Both medical and recreational marijuana products are subject to sales tax.

Is SaaS taxable in Washington?

In Washington state, Software as a Service (SaaS) is subject to sales tax.

This means that businesses providing SaaS are required to collect and remit sales tax on their services. The state treats digital products and services similarly to tangible goods in terms of tax obligations.

Are digital products taxable in Washington?

In Washington state, as of 2024, digital products such as downloaded music, e-books, and software are subject to retail sales tax.

This means that consumers purchasing these items will need to pay the applicable state and local sales taxes, similar to physical goods.

Are services taxable in Washington?

In Washington state, many services are subject to sales tax in 2024.

This includes personal services like beauty treatments and repair services. However, some services like medical and certain professional services are exempt. Always check the latest state guidelines to determine which services are taxable.

Physical nexus

2023

• Presence of a physical location or office in Washington.
• Having employees or agents working in the state.
• Ownership or leasing of tangible personal property in the state.
• Temporary business in Washington for trade shows or seasonal markets.
• Delivery of goods using company vehicles within the state.

2024

• Presence of a physical location or office in Washington remains unchanged.
• Having employees or agents working in the state remains a criterion.
• Ownership or leasing of tangible personal property continues to establish nexus.
• Temporary business presence, such as trade shows or seasonal markets, still establishes nexus but with clarified duration thresholds.
• Delivery of goods using company vehicles within the state remains a nexus factor, now with stricter enforcement protocols.

Economic nexus

Economic Nexus Thresholds

In 2023, businesses needed to have $100,000 or more in cumulative gross receipts from retail sales sourced to Washington to establish economic nexus. In 2024, this threshold remains the same, ensuring businesses with substantial sales in Washington continue to be required to collect and remit sales tax.

Remote Seller Obligations

In 2023, remote sellers meeting the $100,000 threshold were obligated to register, collect, and remit sales tax. This requirement persists in 2024, maintaining the same compliance obligations for remote sellers.

So, what is the sales tax in Washington if you’re a remote seller? If your business surpasses the economic nexus threshold of $100,000 in gross retail sales into Washington, you are required to collect and remit sales tax. This rule ensures that online and out-of-state sellers contribute to state revenue.

Marketplace Facilitators

In 2024, marketplace facilitators continue to be responsible for collecting and remitting sales tax if their platform facilitates more than $100,000 in sales to Washington customers. This mirrors the 2023 requirement, aimed at ensuring tax compliance in growing online marketplaces.

Local Tax Collection

The changes for 2024 have not altered the responsibilities regarding local tax collection. Businesses continue to collect local sales tax based on destination sourcing, reflecting the same process in place in 2023.

Exemptions and Reporting

Exemptions for specific industries and products continue unchanged in 2024. Businesses must still file periodic sales tax returns detailing their taxable sales, which remains consistent with 2023 practices.

Sales tax exemption certificates

In Washington State, a sales tax exemption certificate allows businesses and individuals to purchase goods and services without paying sales tax.

To qualify, the buyer must present a valid exemption certificate at the time of purchase. Exemptions may apply to resellers, manufacturers, farmers, non-profits, or specific industries under certain conditions. The certificate must include details like buyer and seller information, a description of the items being purchased, and the reason for exemption.

Sales tax discounts and incentives

In Washington state in 2024, businesses can take advantage of several sales tax incentives and discounts aimed at stimulating economic growth and reducing the financial burden on companies. Key incentives include:

Sales Tax Exemption for Manufacturing Machinery and Equipment: Businesses engaged in manufacturing, research and development, or testing operations can benefit from a sales tax exemption on the purchase or lease of machinery and equipment used directly in these activities.

High-Technology Sales and Use Tax Deferral/Waiver: Businesses involved in advanced technology fields such as biotechnology, advanced computing, and digital media can defer or waive sales and use tax on the purchase of high-tech equipment, as well as on the construction of research and development facilities.

Renewable Energy Equipment Sales Tax Exemption: Companies investing in renewable energy machinery and equipment, including solar, wind, and bioenergy, can enjoy a sales tax exemption, encouraging the adoption of sustainable energy solutions.

Data Center Investment Sales Tax Exemption: Businesses that invest in qualifying data center projects, particularly in rural areas, may benefit from a sales tax exemption on server equipment and power infrastructure, fostering tech industry growth in various regions of the state.

Film Production Sales Tax Incentive: The state offers sales tax relief for businesses involved in film production activities, allowing them to purchase goods and services related to film production without incurring sales tax, thus promoting the local entertainment industry.

State tax holidays in Washington for 2024

Sales tax holidays are periods when certain products are exempt from state sales tax, aimed at boosting consumer spending on specific goods. Washington does not have any sales tax holidays in 2024.