← All insights

Washington sales tax for online sellers

Selling online from a Washington base — through Shopify, Etsy, eBay, your own site, Amazon, or some combination — pulls you into Washington sales tax in ways that can be subtle. Here's the practical version of what you actually need to know.

Washington is destination-based

Washington uses destination-based sourcing for sales tax. That means the rate you charge depends on where the buyer takes delivery, not where you ship from. A customer in Spokane and a customer in Seattle both buying the same hoodie owe different combined sales tax rates because their local jurisdictions levy different amounts on top of the state's portion.

WA DOR publishes a downloadable rate table and offers a free address-based rate lookup. Most sellers use one of two approaches: a marketplace handles the rate calculation automatically (more on that below), or a sales-tax engine like Avalara/TaxJar integrated into the store does it.

Marketplace facilitators handle a lot for you

This is the part that surprises new sellers in the best way. Washington's marketplace facilitator law makes the marketplace itself responsible for collecting and remitting sales tax on third-party sales made through it. In practice:

• Amazon collects WA sales tax on your behalf for sales made on Amazon.
• Etsy does the same.
• eBay does the same.
• Walmart Marketplace, Reverb, and most other major platforms do the same.

For sales made through those marketplaces, you don't separately collect WA sales tax — the platform does it. You still need to report those sales on your WA return (typically under "Retail Sales" with a corresponding deduction), but you don't owe sales tax on them.

Direct sales (your own website) are on you

For sales through your own Shopify store, your own checkout, an in-person market, or any channel that isn't a marketplace facilitator, you are responsible for collecting and remitting WA sales tax. That means:

• Charging the correct destination-based rate on every WA delivery.
• Recording the sales tax you collected (it's not your money — it's WA's, in trust).
• Remitting it on your DOR filing.

Out-of-state sales are a separate question — they generally aren't subject to WA sales tax, but they may be subject to the destination state's tax if you have nexus there (more on multi-state nexus in a future post).

Filing it

You file sales tax on the same DOR portal where you file B&O — they're filed together on the Combined Excise Tax Return. Your filing cadence (monthly, quarterly, or annual) is set by DOR based on your total revenue and is the same cadence for both taxes.

On the return, you report total gross retail sales, the deductions (including marketplace-facilitated sales), the taxable sales, and the sales tax owed. The math is straightforward when your records are clean and miserable when they're not.

Common mistakes

• Forgetting to deduct marketplace sales. If you report all your gross retail and don't deduct the portion already taxed by Amazon/Etsy/eBay, you'll double-pay sales tax. Track which sales came through which channel.
• Using a single rate. Charging "WA sales tax 6.5%" doesn't work — that's just the state portion. Local jurisdictions add their own and you need to charge the combined rate at the buyer's address.
• Forgetting B&O on top. Sales tax is collected from the customer. B&O is on you, on the gross. Both apply.
• Holding the sales tax in operating funds. Sales tax you collect isn't revenue — it's a liability you owe DOR. Treating it as available cash and then scrambling at filing time is a classic small-business cash-flow mistake.

Information drawn from Washington Department of Revenue guidance. Sales tax rules — especially marketplace facilitator definitions and multi-state nexus — change. Verify current specifics or talk to us for a custom read on your business.

Source: Washington Department of Revenue