Washington State Destination Tax
As of July 1, 2008, Washington State retailers will need to collect sales tax based on the destination of the shipment or delivery - "destination-based." This only affects shipments and deliveries to locations within Washington State. Basically, all WA businesses that ship products to WA state addresses are now required to charge the correct sales tax for the destination city. For example, if you are a Washington business and sell an item online that is to be shipped to Bothell, WA, then you will have to charge the same sales tax as any store operating in Bothell. So tax charged to Bothell orders will be different than Seattle orders. According to the Washington Dept. of Revenue, the tax tables will be updated quarterly. Totera is currently developing a software solution that will be integrated into an wide range of shopping carts. Our solution will automatically reference the state database to determine the current tax rate based on the shipping zip code and then add the correct sales tax to the shopping cart during checkout.Examples of Destination-based Sales Tax
SOURCE: http://dor.wa.gov- A resident of Olympia orders a pizza from a restaurant located in Tumwater. The store delivers the pizza to the customer in Olympia. Sales tax is based on the customer’s location in Olympia.
- A Darrington resident purchases a couch at a furniture store in Bothell and requests that the merchant deliver the couch to the customer’s home in Darrington. Sales tax is based on the customer’s location in Darrington.
- A Vancouver resident purchases a computer online from a merchant in Seattle. The computer is a gift for a student attending college in Pullman. The buyer directs the seller to ship the computer to the student’s address in Pullman. The sale is based on the location of the student in Pullman. The merchant should collect sales tax based on the “ship to” address in Pullman.
- A Spokane Valley resident purchases a mattress at a store in Spokane. The merchant delivers the mattress from its warehouse located in Deer Park to the customer’s home in Spokane Valley. Sales tax is based on the customer’s location in Spokane Valley.
What about deliveries to locations outside of Washington?
There is no change for deliveries outside of Washington. Washington’s sales tax does not apply on sales of goods when the seller delivers the goods to the buyer at a location outside the state.Sales tax on short-term leases:
Sales tax on leases that require recurring periodic payments is generally based on the customer’s location, except the initial payment. For leases (other than motor vehicles, trailers, semi-trailers, or aircraft) that require recurring periodic payments, sales tax is sourced as follows:- If the buyer receives the property at the seller’s location, sales tax on the first periodic payment is based on the seller’s location. Sales tax on subsequent payments is based on the primary property location for each period covered by the payment. The primary property location is considered to be the address for the property that the buyer provides to the seller and that the seller maintains in its records in the ordinary course of business, when use of this address does not constitute bad faith.
- If the buyer does not receive the property at the seller’s location, sales tax on the first periodic payment is based on the location where receipt occurs, if known by the seller. Sales tax on subsequent payments is based on the primary property location for each period covered by the payment.
- Olympia Construction Co. rents a “pressure washer” from Chehalis Rental Co. The rental period is one week. Olympia Construction picks up the equipment in Chehalis and delivers it to their job site in Yelm. Sales tax is based on the seller’s location in Chehalis.
- If Chehalis Rental Co. delivers the pressure washer directly to the job site in Yelm, sales tax would be based on the location of the job site in Yelm.
- Washington’s tax does not apply if Chehalis Rental Co. delivers the pressure washer to the customer at a location outside the state of Washington.
- D&R Construction, located in Olympia, rents a “backhoe” from Construction Rentals, located in Tacoma. The rental period is 45 days, for a lump sum rental payment of $3,000. D&R picks up the equipment in Tacoma and delivers it to a job site in DuPont. Sales tax on the rental payment is based on the seller’s location in Tacoma.
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Destination Sales Tax FAQ
Who is affected?
Destination-based sales tax will apply only to businesses that ship or deliver the goods they sell to locations within Washington. Under the new rules, if a retailer delivers or ships merchandise to a buyer in Washington State, the sales tax is collected based on the rate at the location where the buyer receives or takes possession of the merchandise. There is no change for deliveries outside the state or over-the-counter sales where customers take home goods from the store location.Who is not affected?
If you do not ship or deliver, nothing will change about the way you handle sales tax. For example, if a buyer receives merchandise at your retail business location, sales tax continues to be based on that location – the “origin” of the sale. Additionally, this change does not affect:- Deliveries to locations outside the state of Washington
- Wholesale sales
- Services
- Sales of motor vehicles, trailers, semi-trailers, aircraft, watercraft, modular homes, and manufactured and mobile homes. Sales tax will continue to be based on the seller’s location even if the seller delivers the items to customers.
- Towing companies
Is help available?
We hope to start implementing our destination tax compliant feature into our custom shopping carts within the next few weeks. Contact us if you have any questions, or would like a cost estimate for updating your existing shopping cart software.
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The Godfather of Search
Google has turned itself into a verb synonymous with "search." Just like we ask for a Q-tip or Band-aid in the United States instead of a cotton swab or bandage, we call our Internet searches "Googles." Enter the Titanic, because that is only the tip of the iceberg... Those of us with websites want to be ranked (indexed) high with Google when someone is searching for something we sell. Luckily for us, Google gives us all the tools to figure out how to make this happen--and they give it to us for free! They may change and set fire to the hoops we need to jump through every 1 to 3 months, but they tell us what those hoops are and how to douse the flames so we can be successful in moving our sites up the search rank ladder. Lately, the buzz is Google's plan to set higher search rank preferences for URLs containing targeted keywords. That means your company could rank higher if what you are selling is part of your domain name. So, even if Joe's Gutter Hole has been the top ranked watering hole when searching "fort lauderdale bars," they might just do better to buy the domain fortftlauderdalebarbarssdrinkscocktailsalcoholbeer.com. This really isn't anything new, Yahoo! and MSN already do this, but Google is the big daddy and, if it is going to make a difference in how search results rank, we're about to soon find out. Graphic designers have been educated to design websites in an "F" fashion--the left menu is the vertical line, the header and content the horizontals. Google sets keyword importance in the order they are hit when a spider or bot crawls a site. And, because they can, Google crawls the site from the upper left corner down meaning, if your site is built using industry standards, your left menu is hit first and it is not where keywords are placed...unless your keywords are "contact us," "home," "about us," etc. Kind of funny because I suppose this means most sites share the same first-searched keywords. Now fortftlauderdalebarbarsdrinkscocktailsalcoholbeer.com has to move its menu to the right column and shove as many keywords into the first sentence of the site, or better yet, a text box in the upper left corner of their header with linked keywords. The site is looking good, eh? That is if you can differentiate the domain name in the search results and don't confuse it with ftfortlauderdalebarbersbarberbobshagdohairdo.com. The fact that Google hands out things we "need" for free (Analytics, and I love my iGoogle homepage, my Gdocs, my Google calendars, and especially my Google sidebar with my Google widgets) is not all out of the goodness of their hearts. In exchange for all this, we have to run our business the way they say or we may just not have any customers. No, this isn't an episode of The Sopranos...or is it? I love Mark Cuban's blog. It's pretty eclectic and you can tell his mind runs with random ideas (like someone we know *ahem*) and he's come up with a fun little "what if?" Blog Maverick: Beating Google? Frank always tells me I get a bit overly excited (okay, "intense" is a term I've heard used to describe me on more than a few occasions) about my tech research and conspiracy theories, but I find it fun because the information never grows old. There is always something new to learn and a new way things become linked--working together in interesting ways. I'm also able to comfortably learn to work with the changes--right in the middle is a fun place to be! Has this gotten everyone freaked out yet? Are you ready to redesign your site to be hideous-yet-highly-ranked? Hold off for just a moment. As much as we all want to rank high, we also want customers to not run screaming from our sites. The basics still outweigh the payoffs to the Googlefather and, for our sites to retain customers, they need to remain aesthetically pleasing, easily navigable and friendly. We can't forget the human factor behind these online businesses either. A little good old fashioned customer service and marketing never hurt anyone. If I ordered a shirt and received a note from Joe (remember him from The-Bar-Formerly-Known-as-Joe's Gutter Hole?) that said, "Thank you so much for ordering our merchandise. We hope you enjoy it and, if you do, it would mean a lot to us to have your return business. Please, use this code for 20% off the next item you order and here is another certificate to give a friend so they can try us out!" I would feel there was more than just a screen taking my credit card. I would feel like a person gained something from my actions and that person actually appreciated that I fed my credit card into that screen! So, you write your thank you notes; make them personal; appreciate the consumers who choose you over the plethora of sites available on the global shopping mall we call the Internet and know that I'm here obsessing over the market trends and will be keeping you posted on what's up. Oh, and I'd like to mention that each and every one of Totera's customers are very important to us and we cherish your business. ...are you feeling the love? Donna Winter Project Development and Marketing Coordinator Totera Web Systems *originally posted 05/17/2008
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Donna Winter
Totera Web Systems
