Washington sales tax & B&O: rates, nexus & CETR filing

$100,000 in cumulative gross retail sales into Washington during the previous or current calendar year — sales only, no transaction-count test. Washington adopted economic nexus in October 2018 and dropped its earlier 200-transaction test in 2020. Once you cross $100,000, register with the Washington Department of Revenue and begin collecting on the first sale of the period.

Washington's state portion is 6.5%. Local jurisdictions (city, county, special districts, transit, public-facility, and lodging) add 0.5% to 4.0% on top, taking combined rates to a maximum around 10.5% in some King and Snohomish County zip codes. Seattle is 10.35%, Bellevue is 10.3%, Spokane is 9.0%. Washington has the most-fragmented local sales tax structure in the US — the DOR rate lookup is essential.

Yes. Washington taxes SaaS, digital automated services, digital products, and remotely-accessed prewritten software at the full state + local rate. Washington was an early adopter (2009 RCW 82.04.192 framework) and the regime is mature. Digital downloads (music, movies, ebooks, software) are also taxable. Pure custom software is exempt. The 'digital automated services' category is broad and covers most modern cloud delivery — assume SaaS is taxable unless you have a specific carve-out.

Washington is a destination-sourcing state. The combined rate (state 6.5% + the destination's local rate) is keyed to the buyer's ship-to address, not the seller's location. Because local rates vary so much (over 700 distinct rate jurisdictions), flat-rate calculations consistently under- or over-collect. The DOR provides a free location-code lookup; on Pro and above, Avalara AvaTax keeps the combined rate current per ship-to address (Free Plan applies manual per-state rates).

B&O tax is NOT sales tax — it's Washington's gross-receipts tax on the privilege of doing business, paid by the business on its own revenue. Rates vary by classification: 0.471% for retailing, 0.484% for wholesaling, 1.5% for services. Sellers owe both sales tax (collected from customers) AND B&O tax (paid out of their own pocket). B&O is reported on the same Combined Excise Tax Return (CETR), which is why every Washington return has both pieces.

Washington requires marketplace facilitators with $100,000+ in WA sales to collect and remit on behalf of third-party sellers. Amazon, Etsy, eBay, Walmart, and Shopify Markets in WA are facilitators. Note: sellers still owe Retailing B&O tax on the marketplace gross sales even though the sales tax is collected by the facilitator. The marketplace handles sales tax; you handle B&O. This split trips up SMBs who think marketplace coverage means zero WA obligation.

The DOR assigns frequency by annual tax liability: monthly (returns under $1,050,000 in gross income still file monthly if assigned), quarterly, or annual. Monthly returns are due the 25th of the next month; quarterly and annual by the end of the next month. Filing is electronic via the DOR's My Account portal. The Combined Excise Tax Return (CETR) reports sales tax, use tax, B&O tax, and any special taxes (litter, hazardous-substance, etc.) on one form.

(1) Forgetting B&O tax — treating Washington like a sales-tax-only state and missing the gross-receipts liability that comes with it. (2) Using a flat rate instead of the destination-specific local rate (Washington has 700+ jurisdictions). (3) Not classifying SaaS / digital automated services as taxable. (4) Missing the Retailing B&O tax on marketplace gross sales (the marketplace handles sales tax but B&O is still on you). (5) Missing the 25th-of-month monthly deadline (most other states are the 20th).