Are Professional Services Taxable In Washington State?

WHICH GOODS AND SERVICES ARE TAXABLE?

Determining whether or not the products or services your company sells are taxable in Washington is the starting time step in sales tax compliance.

Traditional Goods or Services

Goods that are subject to sales tax in Washington include concrete property, like article of furniture, home appliances, and motor vehicles.

The purchase of prescription medicine, groceries and gasoline aretax-exempt.

Some services in Washington are subject to sales tax. For a detailed list of taxable services view this folio from the Washington Department of Acquirement website.

Digital Goods or Services

A digital skilful or service is anything electronically delivered, such as an album downloaded from iTunes or a picture purchased from Amazon.

Washingtonrequires businesses to collect sales taxation on the sale of digital goods or services.

HOW TO Annals FOR WASHINGTON SALES Taxation

If y'all determined that you need to charge sales tax on some or all of the appurtenances and services your business sells, your adjacent pace is to register for a seller's allow. This allows your business to collect sales tax on behalf of your local and state governments.

In guild to register, you volition need the following information:

Purpose of application
Ownership construction
Business name
Owners & spouses
Business concern info including location, business activities, bank name, etc.
Employment/Elective Coverage

Annals for a Seller's Permit online through the Washington Department of Revenue

Become A SELLER'S PERMIT

Fee: $19

Expiration: Business Licensing Service volition transport you a renewal notice 45 days before the license expires.

Save Money with a Resale Certificate

With a resale certificate, likewise known every bit a reseller's permit, your business does not have to pay sales revenue enhancement when purchasing appurtenances for resale.

Download the Resale Certificate through the Washington Department of Revenue

Download Resale Certificate

Education: Present the certificate to the seller at the time of purchase.

COLLECTING SALES Taxation

Subsequently getting your seller's permit and launching your concern, you will demand to determine how much sales tax you need to accuse dissimilar customers. To avert fines and the risk of plush audits, it'due south of import for business organisation owners to collect the right rate of sales revenue enhancement.

When calculating sales tax, you'll need to consider the following kinds of sales:

Shop Sales
Aircraft In-Country
Out-of-State Sales

Store Sales

For traditional business concern owners selling appurtenances or services on site, calculating sales tax is easy: all sales are taxed at the rate based on the location of the store.

Here'southward an example of what this scenario looks like:

Mary owns and manages a bookstore in Everett, Washington. Since books are taxable in the land of Washington, Mary charges her customers a flat-rate sales revenue enhancement of 9.2000% on all sales. This includes Washington's land sales tax rate of 6.500%, and Everett'southward sales tax charge per unit of 2.7000%.

In-land Sales

The state of Washington follows what is known as adestination-basedsales taxation policy. This means that long-distance sales within Washington are taxed according to the accost of the [if origin=seller; if destination=buyer]. This policy applies to state, canton, and metropolis sales taxes.

Consider the following instance:

Steve runs his own business selling electronics on eBay out of his home in Spokane, Washington. A customer living in Tacoma finds Steve's eBay page and purchases a $350 pair of headphones. When calculating the sales tax for this purchase, Steve applies the vi.500% state tax rate for Washington, plus iii.1000% for Tacoma's city tax rate. At a total sales tax charge per unit of 9.600%, the total toll is $383.60 ($33.threescore sales revenue enhancement).

Out-of-state Sales

Washington businesses merely need to pay sales revenue enhancement on out-of-state sales if they havenexus in other states.Nexus means that the business has a concrete presence in another land.

Common types ofnexus include:

Aphysical location, such as an function, store, or warehouse
Anemployee who works remotely or who is a traveling sales representative
Amarketing chapter
Drop-shipping from a 3rd political party seller.
Atemporary physical location, including festival and fair booths.

FILE YOUR SALES TAX Return

Now that you've registered for your Washington seller'southward let and know how to charge the right amount of sales taxation to all of your customers, you lot are all set to file your sales revenue enhancement render. Simply be certain to go along up with all filing deadlines to avoid penalties and fines.

Recommended: Hiring a business auditor tin help your concern file taxation returns equally well as issue payroll and manage bookkeeping. Schedule a consultation with a business concern auditor today to relieve thousands of dollars on your taxes.

How to File

Washington requires businesses to file sales tax returns and submit sales tax payments online.

Download the Resale Certificate through the Washington Department of Acquirement. Present the document to the seller at the time of purchase.

File the Washington Sales Tax Render

You lot volition do this with the My DOR page through the Washington Land Section of Revenue.

File Online

How Often Should Y'all File?

How often you lot need to file depends upon the total amount of sales tax your business collects. The state of Washington volition enquire for an estimate of expected sales tax when you obtain your Seller's Permit, and will assign you a filing frequency. If and when yous cross into a certain threshold of sales tax collected, the State will warning y'all nigh what subclass you vest in.

Notation: Washingtonrequires yous to file a sales revenue enhancement return even if you have no sales taxation to report.

Filing Deadlines

All sales tax return deadlines fall on either the 25th or the last day of the month, unless information technology is a weekend or federal holiday, in which case the deadline is moved back to the next business day. Beneath is a listing of this yr's filing deadlines.

For a complete list of deadlines, cheque out the 2020 Tax Filing Calendar

Annual filing: January 31, 2020

Quarterly filing:

Q1 (Jan. - Mar.):Due April 30
Q2 (April - June):Due July 31
Q3 (July - Sept.):Due Oct 31
Q4 (Oct. - Dec.):Due January 31

Monthly filing: The 30 th of the following month, or the next business organisation day, e.g.April 30th for the calendar month of March, orMay 31st for the month of April.

Penalties for Late Filing

Washington charges abelatedly filing penalty of 9% for the first month, 19% for the second, and a maximum of 29% for the third month, and all fourth dimension thereafter.

Source: https://howtostartanllc.com/taxes/washington-sales-tax

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