South Dakota v. Wayfair: What it Means to Ecommerce

Supreme Court ruled, June 21, 2018, to allow individual states to require that e-commerce retailers begin collecting sales tax on sales made within state lines.

In other words, the Wayfair decision allows states to require out-of-state businesses without a physical presence to collect and submit the tax on sales delivered into their state.

Based on this ruling the Washington Department of Revenue established a threshold of $100,000 in gross retail sales or 200 transactions to Washington consumers in the current or previous year. Any out-of-state business that does not have physical presence in Washington, but meets either of these thresholds, will be required to register and begin collecting Washington sales tax.

Out-of-state businesses that have annual retail sales between $10,000 and $100,000, and have less than 200 transactions into Washington, must still comply with the state’s current Marketplace Fairness law.

The Marketplace Fairness law has been in effect since Jan. 1 and requires out-of-state businesses without a physical presence to make a choice to either collect sales tax or follow use tax notification and reporting requirements.

Washington businesses that make sales into other states should be aware that they may now be required to register and collect sales tax in those states for items shipped outside Washington. Checkmtc.gov or streamlinedsalestax.org for information about tax collection and registration requirements in other states.

Businesses can go through Streamlined Sales Tax’s central registration system to register in all 24-member states (including Washington) simultaneously. There are also Certified Service Providers available to assist with the tax collection and filing process.

If a business has concerns about complying with the Oct. 1 deadline, they can contactDORMarketplaceFairnessWaiverRequest@dor.wa.gov.

The Department of Revenue is Washington state’s primary tax agency, nationally recognized for innovation and quality customer service. Revenue administers nearly 60 categories of taxes that help fund education, social services, health care, corrections, public safety, natural resource conservation and other important services counted on by Washington residents.