Washington State sales tax guide for small business owners

Published 3 December 2025

Table of contents

• What is Washington State sales tax?
• How much is sales tax in Washington State?
• Who needs to collect sales tax?
• How to set up a Washington sales tax account
• When are sales tax returns due?
• Streamline sales tax with Xero
• FAQs on Washington sales tax

Key takeaways

• Washington sales tax includes 6.5% state sales tax plus local sales taxes.
• Sales tax applies to most tangible personal property and taxable services you sell.
• Business owners with physical or economic nexus in the state must collect and remit sales tax.
• When you get a business license, the state will let you know your filing frequency.
• The Washington Department of Revenue uses a single return for business and occupational tax, excise tax, and sales tax.

What is Washington State sales tax?

Washington sales tax is a tax paid by consumers at the point they purchase taxable goods or services in the state of Washington. Although consumers pay this tax, business owners handle its collection and send the money to the state.

How much is sales tax in Washington State?

The base sales tax rate is 6.5%, and then local governments can add their own sales taxes on top. As of 2025, local rates range from 1 to 3.9% – that means the effective Washington sales tax rate varies from 7.5% to 10.4%, depending on where you are.

Who needs to collect sales tax?

You must collect sales tax if you sell tangible personal property or taxable services in the State of Washington. Most personal property is taxable, except groceries and prescription drugs. Note that soft drinks and prepared foods are subject to sales tax.

Taxable services include cleaning, repairs, tattooing, and any other services – check out the DOR website for a complete list of taxable services.

Rules for remote sellers

Remote sellers must collect Washington State sales tax if they have physical or economic “nexus” (an established presence) in the state.

• Physical nexus includes retail stores, offices, employees, or other significant physical presence in the state – for example, storing inventory in Washington.
• Economic nexus applies if you have more than $100,000 in sales to customers in Washington.

Also, sellers must collect Washington sales tax if they are organized or commercially domiciled – if you register your LLC or your corporation – in Washington, regardless of where you're located or your volume of sales in the state.

What if you're an Amazon seller who uses Fulfillment by Amazon?

Check your inventory report from Amazon Seller Central. Inventory stored in the state can trigger physical nexus, meaning you have to collect sales tax regardless of your volume of sales.

How to set up a Washington sales tax account

First, set up your business, then get a Washington State business license and any local permits you need. The Washington Department of Revenue (DOR) will issue you an account number called a Unified Business Identifier (UBI) and let you know how often you need to file returns. Give yourself some time, as this process can take a few weeks.

Set up a SecureAccess Washington account

You need a SecureAccess Washington (SAW) user ID and password to file your returns online. If you set up your business account online, the administrator will get login details, and can then grant access to others.

If you don't list an administrator when you set up the business account, you can set up a new SAW account with information from a letter you've received from the DOR. Don't have a letter? Ask the state for one.

Check out Washington State's guidance for small businesses to learn more.

Complete the business return online

Once you're ready to file, sign in to your DOR online account. Then complete the form as prompted.

In the state sales and use tax section, note your gross sales and any deductions – the difference is your taxable sales. The system multiplies this amount by 0.065 (the state sales tax rate of 6.5%) and displays the tax due. Then, in section 3, you calculate any local sales tax – just note the amount of taxable sales and the location code. The DOR will then calculate the local rate and the tax due.

Here’s more about how to calculate sales tax.

When are sales tax returns due?

The due date varies based on your filing frequency:

• Monthly – the 25th of the month following the month of sales
• Quarterly – on the last day of the month following the quarter of sales
• Annually – April 15 following the year of sales

All due dates move to the next business day if they fall on a weekend or holiday.

You can also make your payment online.

Late payment penalties

The penalties for filing late are fairly severe:

• 9% penalty for all late payments
• 19% if you don't pay by the end of the month following the due date
• 29% if you don't pay by the end of the second month following the due date

For example, if you owe $5,000, the late payment penalty is $450 even if you're a day late. If you still haven't paid by the end of the second month, the penalty increases to $1450.

Interest on late payments

The DOR also charges interest on late payments. The rate updates annually – as of 2025 it's 7%, and it's scheduled to drop to 6% in 2026.

What if you don't register for a sales tax account?

Make sure you register. If not, the state may assess penalties against you and rescind your local business licenses.

However, you might be able to avoid penalties and comply if you qualify for the Voluntary Disclosure Program. To qualify, you must reach out to the DOR before they contact you. They’ll look back 4 years or the length of time you've had nexus in the state if it’s less than four years. You’ll have to pay the sales tax due plus interest (backdated to the return due date), but the state will not apply the 29% late penalty, the 5% penalty for unregistered businesses, or the 5% penalty for understated tax.

Streamline sales tax with Xero

Xero accounting software makes tax calculations easy.

• Easily calculate sales tax on invoices with Xero's accounting software.
• Sync with your point of sale software to track sales and sales taxes collected.
• Generate sales tax reports so you can easily file state returns, or connect an app that facilitates e-filing.
• Xero updates your accounting records automatically so that you easily see how your sales tax payments affect your cash flow.

Try Xero for free today and simplify sales track calculations, tracking, and compliance.

FAQs on Washington sales tax

Got more questions? Check out these answers to small business owners' common questions about sales tax in Washington.

How do you find the local sales tax rate in Washington?

The Washington Department of Revenue’s sales tax rate look-up tool shows you the exact sales tax rate for any address you enter. The DOR also has a mobile app you can use to look up rates.

Most e-commerce apps have tools that automatically calculate sales tax rates based on where you're sending your products, while most point-of-sale software calculates sales tax based on where you're making the sale.

What is a use tax?

Use tax applies when a Washington-based consumer (or business owner) buys something without paying sales tax.

For instance, if you’re based in Washington and buy something in Oregon (one of the few states with no sales tax), you report your purchase on your business tax return and pay use tax. The use tax rate is the same as the sales tax rate in your area.

What is destination-based sales tax?

Destination-based sales tax means you use the rate in the buyer's area. For example, if you mail a product from Seattle to Tacoma, you apply the sales tax rate in Tacoma.

What if you have to collect sales tax in multiple states?

If you're a remote seller who has to deal with sales tax in multiple states, you can register for a sales tax account with Washington State and most other states through the Streamlined Sales Tax Registration System (SSTRS). Once registered, you must file a Washington sales tax return, even if you don't have enough sales to meet the economic nexus threshold.

What is a Certified Service Provider?

A Certified Service Provider (CSP) is a professional who helps businesses meet sales tax obligations in multiple states. They can register your account, calculate your tax due, file your returns, and deal with notices from the state revenue agency.