The Washington Department of Revenue spent some time figuring out the implications of the South Dakota v Wayfair decision (June 21, 2018) as it applies to their notification rules threshold of $10,000. According to the Department of Revenue, Washington determined the Wayfair case represents a “change in federal law” and conflicts with the collect or report provisions of RCW 82.08.053. This statement clarifies the legal landscape in Washington and amounts to taxpayers being beholden to both thresholds.
“The Wayfair decision represents a change in federal law that permits states to impose greater sales and use tax collection obligations on sellers than was previously allowed. Pursuant to RCW 82.32.733, the Department has determined this change in federal law creates a conflict with the “collect or report” election provisions of RCW 82.08.053. Specifically, under federal law as applied in Wayfair, Washington can require remote sellers and marketplace facilitators that have $100,000 in sales or 200 transactions in the state to collect sales and use tax on those sales. To the extent the “collect or report” election provided in RCW 82.08.053 would limit this authority to require sales and use tax collection, the election provision conflicts with the change in federal law and will have no further force and effect.
Effective October 1, 2018, remote sellers and marketplace facilitators that have $100,000 of gross retail sales or 200 retail transactions in the state during the current or prior calendar year are required to collect and remit sales tax on all taxable retail sales in Washington according to RCW 82.08.020 and 82.08.050. Additionally, for those remote sellers and marketplace facilitators meeting these requirements, the provisions of RCW 82.08.053 that provide the option to collect or comply with the use tax notice and reporting requirements in chapter 82.13 RCW will have no further force and effect. This notification satisfies the requirements of RCW 82.32.733.”