The State of Washington recently passed SB 5581 which simplifies economic nexus rules for remote sellers and marketplace facilitators which became effective immediately upon signing by the governor on March 15, 2019. The legislation eliminates the 200 sale threshold for economic nexus and codifies the $100,000 in annual sales threshold based on cumulative gross receipts on retail sales (previously imposed by the Department of Revenue) as the standard for meeting economic nexus until December 31, 2019. Starting January 1, 2020, the $100,000 threshold will be based on cumulative gross income in Washington.
The bill states that a business that establishes economic nexus one year will have economic nexus for the remainder of that year and the entire next year. This means businesses who meet economic nexus must register with the state and begin to collect and remit sales tax. Additionally, the state eliminated click-through nexus which previously required remote sellers to collect and remit sales tax if the seller enters into an agreement with Washington residence and is given consideration for referrals to the remote seller and the gross receipts of the consideration for referrals exceed $10,000. The legislation also eliminates the report or notice requirements for sellers making between $10,000 and $100,000 in remote sales. Finally, the legislation also indicates that remote sellers will become liable for other transaction fees and taxes beginning in 2020.
