Washington – Guidance Issued for Direct Pay Permits

SALT Report 1176 – The Washington Department of Revenue has updated a sales and use tax guide for direct pay permits in order to clarify the eligibility requirements for the program.  A business may apply for a direct pay permit if it reasonably expects to have a cumulative tax liability of at least $240,000 during the current calendar year or makes over $10 million of taxable purchases in a calendar year.

Businesses that are interested in applying for a direct pay permit should send a letter of interest to the Department that includes:
  • Business name and UBI/TRA number
  • Primary business activity
  • Verification that the business meets all eligibility requirements
  • Familiarity regarding the use tax accrual process and the ability to comply with all record-keeping requirements; and the
  • Name and phone number of the businesses contact person
The Department will review the letter of interest and may contact the business for an interview. During the interview, the Department will discuss and verify the following:
  • Eligibility requirements
  • Tax reporting history of the business, and
  • Use of permits for eligible purchases
After reviewing the application, the Department will send the business a letter granting or denying a direct pay permit. The letter of approval will include a direct pay permit that the business may copy and use with their vendors. If denied a business may petition the Department for reconsideration.
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