Washington State Sales Tax Guide for SaaS and E-Commerce Businesses

2025-08-22

Washington State Sales Tax Guide for SaaS and E-Commerce Businesses

This guide explains who must collect sales tax in Washington State, what’s taxable, current sales tax rates, due dates, and how to register and file online with the Department of Revenue.

Last updated: August 2025

Quick Reference: Washington State Sales Tax 2025

Topic	Details
State base rate	6.5%
Local rates	0%–3.9% (varies by city/county)
Typical combined rate	6.5%–10.4%
Economic nexus threshold	$100,000 gross receipts sourced to WA (current or prior year)
Physical nexus	Any in-state presence (employees, inventory, office, warehouse, events)
SaaS / Digital products	Taxable as “digital automated services”
Registration portal	My DOR eServices
Agency	Washington Department of Revenue

Tip: Track total shipped sales to Washington each month to monitor economic nexus.

Nexus & Liability: Do You Need to Collect Washington Sales Tax?

You must collect Washington sales tax if you meet any of these:

Physical presence nexus: Store, office, warehouse, employees, contractors, or inventory in WA. See Physical presence nexus.
Economic nexus: Exceed $100,000 in gross receipts sourced to WA in the current or prior year (economic nexus explained).
Marketplace facilitator rules: Marketplaces (Amazon, Etsy, eBay, etc.) collect/remit on your behalf, but you may still need to register and file (marketplace facilitators).

Even if under $100,000, businesses organized in Washington State may need to register depending on activities.

What’s Taxable in Washington State?

Category	Taxable?	Notes
Tangible goods	Yes	Most retail sales are taxable
Digital goods	Yes	Downloaded or streamed content (digital products guide)
SaaS / DAS	Yes	Taxable as “digital automated services”
Remote access software (RAS)	Yes	Treated as digital goods
Shipping & delivery	Yes	Taxable when the items are taxable (delivery charges)
Retail services	Yes	Many services are taxable
Food & groceries	Partial	Basic groceries are exempt; prepared food, soft drinks, supplements, and alcohol are taxable (food & beverages)
Web hosting/storage	No	Exempt from retail sales tax, but revenue is subject to B&O instead

Digital Products & SaaS: Washington broadly taxes SaaS, remote access software, subscriptions, and digital goods. Pure hosting and backup services are generally not taxable as retail sales. Businesses may claim exemptions for digital goods purchased solely for business use with a valid certificate.

Sales Tax Rates & Sourcing

Washington uses destination-based sourcing:

Shipped or delivered sales: Tax is based on the delivery address.
Over-the-counter sales: Tax is based on the seller’s location.

See Determine the location of my sale for examples and rules.

Find exact rates with the Tax Rate Lookup or browse Sales & use tax rates and the quarterly Local rates by city (PDF/table).

Registration & Filing

Gather EIN, legal name, business addresses, owner info, and bank details.
Apply online via My DOR eServices.
After approval, you’ll receive your tax account ID and a filing frequency.
File and pay online: Tax returns (how to file / amend ).
No activity? You may need to file a “no business” return or, if eligible, request Active non-reporting status.

Due Dates

Monthly: Returns due the 25th of the following month.
Quarterly: Returns due the last day of the month after the quarter.
Annual: Returns due April 15 of the following year.

If a due date falls on a weekend/holiday, it moves to the next business day. See Filing frequencies & due dates.

Penalties & Interest (Late Filing)

Late filing/payment penalties: 9% after the due date, 19% after the last day of the month following the due date, up to 29% after the last day of the second month following the due date. Penalty waivers may apply for reasonable cause. See Late filing and Penalty waivers.
Interest: Accrues at the state-set annual rate; see Interest rate tables for current rates.

Upcoming Sales Tax Changes (Effective Oct 1, 2025)

Washington will expand the retail sales tax base to include additional service categories (e.g., advertising, certain IT services, custom website development, staffing, investigation/security, custom software, and more). See:

Stay current via News releases.

Best Practices & FAQs

Best Practices

Track sales monthly against the $100,000 nexus threshold.
Keep reseller permits/exemption certificates for 5 years.
Use the DOR rate lookup for address-level accuracy.
Separate shipping charges for taxable vs. exempt items.
Monitor 2025 changes if you sell digital or professional services.

FAQs

What is the Washington State sales tax rate in 2025?

The state sales tax rate is 6.5%. Local rates add 0%–3.9%, making combined rates typically 6.5%–10.4%. Use the Tax Rate Lookup for address-specific rates.

Do out-of-state sellers need to collect Washington sales tax?

Yes. Out-of-state sellers must collect Washington sales tax if they exceed $100,000 in sales sourced to WA in the current or prior year. This is known as economic nexus.

Is shipping taxable in Washington?

Yes. Shipping charges are taxable if the items shipped are taxable. If the order is fully exempt, shipping is not taxed. See delivery charges guidance for details.

Are SaaS and digital products taxable?

Yes. Washington taxes SaaS, digital goods, and remote access software as retail sales. These are treated as digital automated services. See the digital products guide.

What if my customer provides a resale certificate?

Sales for resale are exempt if the buyer provides a valid reseller permit. Keep copies of all certificates in your records for at least 5 years.

Where do I file Washington State sales tax?

All registration, filing, and payments are done online in My DOR eServices. Depending on sales volume, you may file monthly, quarterly, or annually.