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Tag Archive for Washington

What You Need To Know About The Taxability Of SAAS In Nine Western States

Monika Miles

When it comes to Software-as-a-Service (SaaS) companies, there’s often confusion regarding both nexus and the taxability of this revenue stream.

And while the Wayfair decision seems like it’s directed only at online sellers, traditional multi-state sellers (including those that generate revenue from SaaS and software) are also affected, as nexus is now easier to establish. Once it is established – either by traditional physical presence or by sales volume – then companies will need to consider the taxability rules of SaaS in each state in which they have nexus.

Is SaaS even taxable? Because SaaS and cloud computing don’t always clearly fall into existing tax definitions, different states interpret its taxability in different ways. Some regard it as similar to electronically downloaded software, while others consider it a service, which may be taxable or not. And what about electronically downloaded software? Is it treated differently from SaaS?

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12 Important Details: Sales Tax & Washington’s New Marketplace Facilitators

We recently shared an overview of Washington’s New Marketplace Fairness solution. While we’re skeptical it will help rather than hinder, it’s important you know additional details about marketplace facilitators and sellers. Read on to get an overview of the marketplace, how sales tax comes in, as well as the collection and reporting of it.

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What Is Washington’s Marketplace Fairness? An Overview & New Online Sales Tax Solution

For years, Washington State has been one of the states passing online sales tax legislation. From statutes expanding nexus (making more businesses responsible for the state’s taxes and fees) to its five-point internet sales tax solution, the Evergreen State is quick to come up with more solutions to make the marketplace “fair.”

The latest attempt to level the playing field makes some fairly aggressive changes in the state’s sales tax collection policy for marketplace facilitators.

While the state says it will make the marketplace more fair to brick and mortar retailers, we’d actually argue it’s a compliance burden and onerous on the seller. Why? The “solution” designates three additional definitions businesses will need to examine in order to determine how they apply if the definitions do apply, the business needs to pay close attention to another piece of legislation that may change again in the future.

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How Did Washington Expand Nexus? State Tax Legislation

Over the last few years, Washington has taken an interesting approach to its nexus and state tax law. Back in 2015, it adopted a click-through statute and economic nexus thresholds for businesses making sales in the state. Washington currently has a few other interesting bills up for debate, but in the meantime the Department of Revenue (DOR) enacted another piece of legislation that affects economic nexus. Read more

What To Know About Washington’s Online Sales Tax

Monika Miles

The online sales tax debate continues, with states taking matters into their own hands instead of waiting for Congress to decide how to settle the matter. However, not all states are approaching the issue the same way. We’ve already looked at current and potential legislation in Colorado and Alabama; next we venture to Washington state!

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Washington’s Minimum Wage Hike: What Do You Need To Know?

Monika Miles

Last month’s election results included more than determining the next president and allowing recreational marijuana in California; states across the country also passed legislation changing employment laws – specifically minimum wage and sick pay. I thought it would be interesting to take a look at one of these states (one of our neighbors to the north): Washington.

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An Interesting Look At Sales Tax And Legal Marijuana

Monika Miles

Although the presidential campaign seemed to dominate headlines earlier this month, there was another proposition that passed in California (as well as a handful of other states): recreational marijuana became legal. What does this mean for the Golden State’s sales tax revenue? And how will it affect other industries? I thought it would be worth taking a look at what other states have done and how California may proceed in the coming months.

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Delivery to Washington Customers in Company Owned Trucks Creates Nexus

Creating a not so Happy New Year for out-of-state taxpayers, the Court of Appeals for Division II found that Space Age Fuels, Inc. (Space Age) had nexus for Washington B&O tax based on the delivery of fuels to Washington customers in company owned trucks. Space Age Fuels, Inc. v. Washington, Docket No. 44195-1, Court of Appeals Division II (12/31/2013).

Space Age, a corporation maintaining its principal place of business in Oregon, operates a wholesale and retail fuel business. While all of its fuel stations are located in Oregon, Space Age had about 40 wholesale customers in Washington. The Washington customers would place an order via telephone, fax or email. Space Age quoted a price for fuel and a separate price for delivery of the fuel, which varied according to distance. Read more

Sellers of Bundled Services Beware

Money GiftA recent Washington excise tax determination points out the need for sellers to be careful when bundling retail sales taxable and service taxable activities into a single package or bundle. In Det. No. 13-0059, 32 WTD 232 (2013) the Department of Revenue held that wedding packages were subject to retail sales tax despite the inclusion of non-taxable services within the wedding package.

The taxpayer sold wedding package that included facility rental, decorations, furnishings, catering and linens. The administrative law judge agreed with the taxpayer that amounts received for facility rentals are licenses to use real property that are subject to services B&O, but not retail sales tax. However, this facility rental was bundled with a number of other items that are clearly subject to retail sales tax, such as catering.

The determination notes that prior to July 1, 2008 Washington used a “true object” test to determine whether a bundle of items and services were subject to retail sales tax. For periods after July 1, 2008 there is a specific bundling rule that must be followed. This rule provides in general that if a bundle of property and services are sold for a single itemized price that includes items that are subject to retail sales tax and items that are not, the entire bundle is subject to retail sales tax. Read more