If you’re selling digital services and products to customers in Washington, then you might be liable for the state’s sales tax. This guide covers two very important parts of the system:
Registering for the tax, and then
Filing tax returns on time.
We’ve scoured the Washington Department of Revenue website to provide you with all the necessary information about sales tax for remote sellersin one place.
How to register for sales tax in Washington
Washington allows remote and foreign sellers to register for sales tax online.
First you must apply for a business license using the Department of Revenue (DOR) Business Licensing Wizard. Then you can register for sales tax. Legally you must do this before you make your first sale in the state, and you must wait until you receive your license to make any taxable sales.
Finally you’ll create an account on My DOR, an online portal. This portal is also where you’ll file and pay your tax returns. More on that later!
Apply for a business license
1. Go to the Business Licensing Wizard site. Select up to 5 activities that describe your business (but only 1 is required). You can search the menu with keywords, like so:
2. The following questions are about your business structure (Corporation, Sole Proprietorship, etc.) and the employees you’ll hire in Washington (if any).
3. Next you’ll provide the physical location of your business. First select your country at the top, then fill in the rest of the street and city details. Be sure to click “Verify” before moving forward!
4. The next question asks if your business has a physical presence in any cities, including whether you travel to certain cities within Washington in order to sell your products. Select all cities that apply.
Note: If you simply have products delivered to a city, this does not count as a physical presence. You can move forward without selecting anything.
5. Eventually you’ll see a screen that lists the license requirements for your business. Depending on which products you sell (e.g. tobacco), you might need to go through extra steps.
The screen will suggest you apply for Tax Registration at this stage (see below), but actually you must wait until you have your first business license. Ignore this and click “Next”.
7. The last step is to enter your email address, then hit “Submit”!
Once submitted, business license applications will take about 10 business days to process. If you have city or state endorsements, it may take an additional 2-3 weeks to receive your business license due to approval time.
When you get it in the mail, you’ll receive two important things:
The Unified Business Identifier (UBI) number that you will need to use when you file your taxes or make changes to your business.
A tax account ID. You’ll need this to create an account and register online.
The Letter ID, printed on the piece of mail (see below). You’ll need this to create your account online!
2. After providing basic contact information and choosing login credentials, you’ll be taken through a multi-factor authentication process to activate your account. Be prepared to check your email a few times.
3. Once activated, log in at the same SAW site, and you’ll see this page below. Click “Get Started” to begin the tax registration process! You will need to provide the Letter ID here.
Tax registration applications take about 5-7 business days. Once processed, you’ll be assigned a tax filing frequency: monthly, quarterly, or annually.
How to file sales tax returns in Washington
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in Washington in a different currency, be sure to convert those to USD using official currency exchange rates
When to file and pay
You must file a sales tax return either monthly, quarterly, or yearly. The deadlines are as follows:
Monthly For monthly filers, reports are due on the 25th day of the month following the reporting month. For example, the July sales tax report is due August 25.
Quarterly For quarterly filers, reports are due on the last day of the month following the reporting period.
April 30, for first quarter ending March 31
July 31, for second quarter ending June 30
October 31, for third quarter ending September 30
January 31, for fourth quarter ending December 31
Yearly For yearly filers, reports for the previous year are due on April 15.
Note: Didn’t make any sales in Washington during your reporting period? You should still report that. This is called a “no business” return and it follows the exact same process as a normal return. (Just a little less data entry 😉)
How to file
Before you get started, you should collect all the information about your taxable sales in Washington during the previous quarter. The tax website suggests having these pieces ready:
total sales and income
total purchases and expenses
You can file online in My DOR with your SAW account information. Log in here.
In the Excise Tax Return panel, click the “File Return” link.
How to pay
Tax payments must be in US dollars. You’ll find your payment options in My DOR, on the Select Payment Type page of the return.
Below is a description of each option:
Automated Clearing House (ACH)
ACH Debit: You authorize the Department’s bank to withdraw the amount you owe from your bank account on the date you select.
ACH Credit: You authorize your bank to send funds to the Department’s account. You must initiate this payment each time you submit payment.
E-check: Enter your bank account number and routing information to make a one-time payment. The transaction is free.
Credit card: Enter your credit card information to make a one-time payment. You can use Visa, MasterCard, American Express or Discover. A 2.5% fee is charged by a non-state vendor for this service.
What to do in between registering and filing?
Well, you must comply with all the rules for Washington sales tax! That means charging 6.5% sales tax and watching out for local level taxes, among other things.
* At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.