United States Sales tax for Washington State

[sockysocks]

For information.

From January 1, 2018 Washington state (zip code WA) residents are required by law to pay sales tax on online purchases regardless of the seller's location. Etsy will collect and remit the taxes so there is nothing you as the seller needs to do.

This is the help page - https://www.etsy.com/uk/help/article/236507470962

[ClosetGothic]

Thanks, Mandy, for a useful post - it can be quite surprising when an order from Washington State comes in.

[AkemiHandmade]

Thank you Mandy for posting this info.

[StudioMilika]

Has anyone asked Revenue Canada about this? In Canada, we can opt out taxes if we sell less than 30K a year (tax number is not mandatory).

But with this new law in the states (for PA and WA states), how do we deal with this if we don't have a tax number in Canada?

[ClosetGothic]

Céline, you don't have to do a thing regarding PA and WA states, Etsy looks after that so it doesn't matter whether you have tax number or not; it simply doesn't go through your financial books.

I do suspect that we are just seeing the beginning of online taxes though. New Zealand is bringing in GST for international online purchases at the end of 2019. This will only be applied to individual businesses selling more than $60,000 to New Zealand buyers so 'the Big Guys' rather than small business.

It's going to be interesting.

[StudioMilika]

Thanks Janne :) I'm just wondering, let's say a customer buys for 20$ and that Etsy adds 5$ for taxes to WA and PA customers. I know Etsy automatically sends the 5$ to PA and WA states, but what do I enter in my books? Do I just enter 20$ as revenue or do I have to say my income was 25$ and then ask for a tax deduction in my province?

I mean, if I just enter 20$ as income (and don't enter the 5$ in my books), it's easy peasy, but if I have to write +25$ income, then -5$ taxes in my books, I guess I can't since I don't have a tax number?

[sockysocks]

Celine, the help page on this www.etsy.com/uk/help/article/236507470962 says

Sellers do not have to update their sales tax settings in their shop for orders shipped to Washington state or Pennsylvania state in the US. Those tax settings are used for states/regions where Etsy does not automatically collect sales tax.

Sellers cannot opt out of Etsy automatically collecting sales tax for items shipped to customers in Washington or Pennsylvania.

Note: Etsy sellers do not need to remit sales tax on their Etsy sales to a state where Etsy remits sales tax on your orders.



So basically, if someone in those states buys something for 20$ that is what you put in your books.

[StudioMilika]

Ok, thank you very much Mandy :)

[HyakDesigns]

What about WA B&O tax?