Washington retail sales and use tax: 2026 collection, sourcing and filing

Figures are for tax year 2026, as they stand on 25 September 2026. Local rates are quoted for the quarter 1 October to 31 December 2026 and change every quarter. A short section covers periods before 1 October 2025, when the service rules were different.

Scope and who this is for

• Businesses that sell goods, digital products or retail services to customers in Washington, and must decide what to charge, where the sale is sourced, and how to file.
• Out-of-state sellers deciding whether they must register (remote sellers, marketplace sellers, marketplace facilitators).
• Businesses and individuals that owe use tax because no sales tax was charged.
• Out of scope: business and occupation (B&O) tax detail (a separate Washington B&O Guide covers it), cannabis, lodging-specific taxes, motor vehicle excise taxes, and tribal sales.

Washington has no general personal or corporate income tax on business profits. A seller that collects sales tax usually also owes B&O tax on the same gross receipts, reported on the same excise tax return. The two are separate taxes: sales tax is collected from the customer, B&O tax is the seller's own cost.

Ask the client first

• Where is the business located, and does it have any physical presence in Washington (staff, inventory, office, property)?
• If it is outside Washington: what were its combined gross receipts sourced or attributed to Washington in the current and the prior calendar year, counting all activities, marketplace sales and exempt sales?
• Is it organized or commercially domiciled in Washington?
• Does it sell through a marketplace facilitator, directly, or both?
• What exactly does it sell? Goods, digital goods, software as a service, custom software, IT support, website development, advertising, live classes or seminars, security or investigation, temporary staffing, construction, landscaping, repair, personal training?
• Where does each customer receive the goods or service (address)?
• Does it hold a Washington business licence (UBI number), and what filing frequency was it assigned?
• Does it have service contracts signed before 1 October 2025, and were they paid before that date?
• Does it sell to schools, school districts or public libraries?
• Does it buy items for resale, and does it hold a current reseller permit? Does it accept reseller permits from customers?
• Has it bought anything for use in Washington without paying Washington sales tax?

The method, step by step

1. Decide whether the seller must register and collect. A business with physical presence must register. An out-of-state seller must register if a threshold in the next section is met. If all its retail sales run through a marketplace facilitator that collects for it, it does not collect sales tax itself but still files for B&O tax if it meets a registration threshold.
2. Classify each sale. Is it a retail sale of tangible personal property, a digital product, or a retail service? From 1 October 2025 the list of retail services is longer (see the ESSB 5814 section). Then check exclusions and exemptions (food, prescription drugs, resale, schools and libraries from 1 July 2026).
3. Source the sale. Washington is destination-based: use the location where the customer receives the goods or service, following DOR's five sourcing rules in order. Motor vehicles, towing and qualifying florists are the exceptions.
4. Find the combined rate for that location with DOR's Tax Rate Lookup Tool. The state rate is the same everywhere; the local rate depends on the location code.
5. Collect the tax on the selling price. Sales tax collected is a trust fund held for the state.
6. Check your own purchases. Pay use tax on anything used in the business on which no Washington sales tax was paid.
7. File the combined excise tax return in My DOR by the due date for your assigned frequency, reporting sales by location code, taking the right deductions (for example sales collected by a facilitator), and paying in full.
8. Keep records for five years, including every reseller permit or exemption certificate you accepted.

If you skip step 1 and collect anyway, you hold state money without an account to report it. If you skip step 3, you remit tax to the wrong local jurisdiction and the customer may be over- or under-charged.

Rate and registration thresholds for 2026

State rate and the tax base (DOR retail sales tax)

Item	2026 value	Source
State retail sales tax rate	6.5%	DOR retail sales tax; statute RCW 82.08.020 ("six and five-tenths percent")
State use tax rate	6.5% plus the local use tax rate	DOR use tax
Local rate	Varies by city and county; look it up by address	DOR sales and use tax rates

The statute taxes retail sales of tangible personal property, digital goods, digital codes, digital automated services, retail services, extended warranties to consumers, and anything else defined as a retail sale.

Sample combined rates, 1 October to 31 December 2026 (DOR Q4 2026 rate flyer)

Location	Location code	Local rate	State rate	Combined rate
Seattle	1726	4.05%	6.5%	10.55%
Tacoma	2717	4.0%	6.5%	10.5%
Olympia	3403	3.5%	6.5%	10%
Spokane (city)	3210	2.6%	6.5%	9.1%
Vancouver	0605	2.4%	6.5%	8.9%
Edmonds and Lynnwood (highest on this list)	3104, 3110	4.2%	6.5%	10.7%

Combined rates across the state run from 7.6% to 10.7% this quarter. The same rates applied from 1 July 2026. Never hard-code these: DOR publishes new rates each quarter, and a single address can sit in a transit or benefit area with its own code. Use the lookup tool for every address.

Who must register (DOR remote sellers)

Seller	Must register and collect when	Source
Remote seller (no physical presence, not a facilitator)	In the current or prior calendar year it has more than $100,000 in combined gross receipts sourced or attributed to Washington, or it is organized or commercially domiciled in Washington	Remote sellers
Remote marketplace seller	Same test; if all retail sales run through a facilitator that collects, no sales tax to collect, but B&O filing continues	Marketplace sellers
Marketplace facilitator	More than $100,000 in combined gross receipts sourced or attributed to Washington, or physical presence, or marketplace sellers with physical presence in Washington, or organized or domiciled in Washington	Marketplace facilitators
Seller with physical presence	Always, even without meeting an economic threshold	Marketplace sellers

How the $100,000 test works (same source):

• It counts all Washington income: retailing, wholesaling, services and other apportionable activities, not only retail sales.
• It includes sales through a facilitator, through your own website or otherwise, and it includes exempt sales.
• Once met, you collect and report for the rest of the current year and the following calendar year.
• If you did not meet it in the prior year, start collecting on the first day of the month that starts at least 30 days after the date you met it.

Marketplace facilitators must also send each seller a report of its Washington sales for the previous month by the 15th of each month (DOR marketplace facilitators).

Filing frequency (DOR filing frequencies and due dates)

Frequency	Annual tax liability
Annual	$1,050 or less
Quarterly	$1,051 to $4,800
Monthly	$4,801 or more

DOR assigns the frequency when you register, based on estimated yearly business income; you can ask for a change. A business that does not collect retail sales tax and has B&O gross income under $125,000 a year (calendar years from 1 January 2023) may qualify for active non-reporting status. A seller that must collect sales tax does not qualify.

What is taxable: boundary and exception table

Goods, food and health (RCW 82.08.0293)

Item	Treatment	Source
Tangible personal property generally, including clothing	Taxable when sold to the end user	DOR retail sales tax
Food and food ingredients (groceries)	Exempt	RCW 82.08.0293
Candy	Exempt as food. The statute removes only alcohol, tobacco and cannabis from "food"; candy is not carved out. Taxable only if it is prepared food or sold through a vending machine	RCW 82.08.0293
Prepared food (sold heated, with seller-provided utensils, or two or more ingredients mixed by the seller)	Taxable, subject to the exceptions below the table	RCW 82.08.0293
Food sold through a vending machine	Taxable, including food that would otherwise be exempt; the taxable selling price is fifty-seven percent of gross receipts, with separate rules for soft drinks, bottled water and hot prepared food	RCW 82.08.0293
Soft drinks (sweetened, non-alcoholic; excludes milk products and drinks that are more than half fruit or vegetable juice)	Taxable	RCW 82.08.0293
Bottled water	Taxable (the food exemption does not apply to it)	RCW 82.08.0293
Dietary supplements	Taxable, unless dispensed under a prescription	RCW 82.08.0293, RCW 82.08.925
Prescription drugs	Exempt when dispensed under a prescription	RCW 82.08.0281
Over-the-counter drugs	Taxable, unless dispensed under a prescription	RCW 82.08.940
Alcohol	Taxable (separate liquor taxes are out of scope)	RCW 82.08.0293

What is not prepared food (same statute): mixed food that the seller only cuts, repackages or pasteurizes; raw eggs, fish, meat and poultry that the consumer needs to cook; and, when sold without eating utensils provided by the seller, food sold by a manufacturer in NAICS sector 311 (other than bakeries), unheated food sold by weight or volume as a single item, and bakery items (bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas). These stay exempt food. A seller whose prepared food sales are more than seventy-five percent of its food sales, and which makes utensils available, is treated as providing utensils, with a limited exception for packages of four or more servings.

Other exemptions DOR lists include trade-ins, newspapers, manufacturing machinery and equipment, farm inputs, and certain sales to nonresidents, each with its own conditions. Check the DOR exemptions list and the statute before applying one.

Digital products and software (DOR digital products)

Item	Treatment	Source
Digital goods (downloaded or streamed music, movies, books)	Taxable	DOR digital products
Digital automated services, including software as a service	Taxable	DOR IT services
Remote access software (prewritten software used on the seller's or a third party's server)	Taxable	DOR digital products
Custom software and customization of prewritten software, however delivered	Taxable from 1 October 2025 (taxed under B&O only before then)	DOR custom software
Web hosting, storage and back-up	Not DAS and not IT services	DOR IT services
Domain name registration	Listed by DOR as a retail service	DOR services subject to sales tax
Payment processing	Not DAS and not IT services	DOR IT services

Business-buyer reliefs to check: digital goods (not DAS or remote access software) bought solely for business purposes are exempt; digital products used concurrently inside and outside Washington qualify for the multiple points of use exemption, with use tax apportioned to Washington users. Each needs an exemption certificate.

Services newly taxable from 1 October 2025 under ESSB 5814 (DOR services newly subject to retail sales tax)

Service	Included	Not included	Detail page
Advertising services	Ad design, placement, campaign planning, lead generation, search engine marketing, buying online ad space	Newspaper, printing and publishing, radio and TV broadcasting, billboards and other out-of-home or fixed signage, naming rights	Advertising
Information technology services	Help desk, network support and security, managed IT, IT consulting and project management, onboarding, data processing, data entry	Web hosting, domain registration, payment processing, custom website development, SaaS (taxed separately as DAS)	IT services
Custom website development	Website design, development, support, website consulting and training	Web hosting and domain registration	Website development
Live presentations	Paid lectures, seminars, workshops, courses and continuing education, in person or live online	Accredited school and college classes, performances, sports events, tutoring; from 1 July 2026 also music lessons regardless of the number of participants, presentations by 501(c) nonprofits, before and after school care provided in person and on site by elementary schools, and instruction incidental to excluded performances (DOR special notice)	Live presentations
Investigation, security and armored car	Background checks, guards, event security, armored cars, security system services and monitoring	Locksmiths, forensic accounting, internal HR investigations, process servers, cyber security (taxed as IT instead)	Security
Temporary staffing	Supplying the agency's own employees to work under the client's direction for limited periods; tax is on gross income including staff wages	Direct hires, independent contractors, paymaster arrangements, workers supplied to licensed hospitals; from 1 July 2026 also staffing used by hospital-based clinical providers to supplement their fulfilment of hospital contracts for professional services and for limited periods to supplement hospital staffing (the buyer gives a Declaration for Purchases of Nonretail Temporary Staffing Services, kept five years) (DOR special notice)	Temporary staffing
Custom software	Access to and use of custom software; customizing prewritten software	Unmodified off-the-shelf software (already taxable as prewritten software)	Custom software

Also from 1 October 2025, several exclusions from digital automated services were removed (advertising, live presentations, data processing, and services provided through primarily human effort), and telehealth was expressly excluded.

Points that decide real cases:

• Professional services (accountants, lawyers, engineers, architects, appraisers, lobbyists) stay outside sales tax and are taxed under B&O. Using email or a portal to exchange files does not make them DAS. A do-it-yourself template portal where the professional merely reviews the result could be DAS. Source: DOR ESSB 5814 FAQ.
• Graphic design alone is generally not advertising. It becomes taxable when it is part of advertising, website development, or goods or digital products. Source: DOR ESSB 5814 FAQ.
• Schools and libraries, from 1 July 2026: public libraries, library districts, library service centers, K-12 schools, school districts and educational service districts are exempt on IT services, website development, live presentations, security, temporary staffing and custom software. The seller reports the sale, takes the "Sales of Exempt Services to Libraries and Schools" deduction, and keeps the buyer's exemption certificate for five years. Advertising services are not on the list. Services provided before 1 July 2026 stayed taxable unless existing-contract treatment applied; DOR's grace period for these newly exempt services runs through 30 June 2026. The same grace period applies to the 1 July 2026 live-presentation and hospital-staffing exclusions. Source: DOR special notice.
• Resale: these services can in some cases be bought for resale with a reseller permit.
• Litigation: DOR states it is in legal proceedings over ESSB 5814, including a claim that taxing some advertising breaches the federal Internet Tax Freedom Act. Until a court rules, DOR requires collection. Tell clients to keep collecting and to watch the ESSB 5814 page for outcomes.

Other retail services that were already taxable (DOR services subject to sales tax)

Construction and improving real property; installing, cleaning, repairing or altering goods; landscaping and landscape maintenance; certain recreation (for example fishing charters); personal training at fitness facilities; tanning; tattooing; car washes; catering; towing; parking; alarm monitoring; and credit bureau and tenant screening. Extended warranties sold to consumers are also taxed (RCW 82.08.020). Landscaping and landscape maintenance are subject to sales tax.

Sourcing (DOR determine the location of my sale)

Apply the rules in order and stop at the first that fits:

Rule	Where the sale is sourced
Rule 1	The customer takes possession at your business location: your location
Rule 2	Received elsewhere: where the customer receives it
Rule 3	Receipt address unknown: the customer address in your business records (unless in bad faith)
Rule 4	No record: the address obtained at the time of sale, such as on a card or check
Rule 5	None of the above: goods go to where shipped from; retail services and warranties to where provided; software and digital goods to where first made available for transmission

Exceptions, sourced to the seller's location even when delivered: sales of motor vehicles, trailers, semi-trailers, aircraft and watercraft; towing; and qualifying florists. Labor and services are coded to where they are performed. Leases with periodic payments: the first payment is coded to where the lessee receives the equipment, later payments to where it is stored or used.

Use tax (DOR use tax)

• Use tax applies to goods and certain services used in Washington when sales tax was not paid. The buyer owes it, whether a business or an individual.
• Typical cases: items bought without tax for resale and then used in the business; purchases in Oregon or another lower-tax state; online or mail-order sellers that did not collect; purchases from private sellers.
• Value: generally the purchase price, including freight and delivery charged by the seller.
• Rate: the state rate plus the local use tax rate where the item is first used.
• Businesses report it on the excise tax return for the period of first use in Washington. Individuals file online in My DOR or on the Consumer Use Tax Return.
• DOR's FAQ says ESSB 5814 does not explicitly impose use tax on the newly taxable services, but deferred sales tax may be due if sales tax was not paid, and use tax does apply where the service also qualifies as a digital automated service. Source: DOR ESSB 5814 FAQ.

Reseller permits (DOR reseller permits)

• Use a permit only to buy what you resell in the regular course of business, or ingredients and components of new products for sale. Never for supplies, equipment, tools, items given away, or personal use.
• Anyone who misuses a permit owes the tax and a 50% penalty, even with no intent to defraud. The permit may be revoked.
• Permits are generally valid for four years; two years for contractors, businesses open under 12 months, and some others.
• Sellers accepting permits must obtain valid documentation for each wholesale customer (they have up to 120 days from the sale to collect it) and keep it for five years. Without it, an audit reclassifies the sale as retail and the seller owes the sales tax.
• A buyer without a permit can pay the tax and later take a "taxable amount for tax paid at source" deduction when reselling, or request a refund.

Worked cases (DOR Q4 2026 rate flyer)

Rates are the Q4 2026 combined rates from the table above. Amounts are illustrative.

1. Shipped sale. A Seattle retailer sells a $1,000 laptop delivered to a customer in Spokane (city) on 5 November 2026. Destination sourcing applies: $1,000 × 9.1% = $91.00. If the customer instead collects it at the Seattle shop: $1,000 × 10.55% = $105.50.
2. Remote seller threshold. An Oregon seller has no Washington presence. In 2026 its Washington sales are $80,000 direct plus $30,000 through a marketplace, $110,000 in all, and it passes $100,000 on 20 August 2026. $110,000 is more than $100,000, so it must register. It did not meet the test in 2025, so it starts collecting on 1 October 2026, the first month starting at least 30 days after 20 August. It deducts the marketplace sales on the return because the facilitator collects on them. Had its total been exactly $100,000, with no other link to Washington, the receipts test would not be met, because the test is more than $100,000.
3. IT services after ESSB 5814. A Tacoma IT firm bills a Tacoma business $5,000 for help-desk support in November 2026: $5,000 × 10.5% = $525.00 sales tax, plus retailing B&O on the gross amount. If the same client were a Tacoma school district, the sale is exempt from 1 July 2026 with the school's exemption certificate.
4. Existing contract. A support contract was signed on 15 September 2025, the services continue after 1 October 2025, and it is billed monthly. It counts as an "existing" contract only because it was signed before 1 October 2025, the services continue on or after that date, and they became retail sales on that date. While its terms stay unaltered, DOR allowed the old treatment (service B&O, no sales tax) through 31 March 2026. For reporting periods beginning on or after 1 April 2026 the firm must collect sales tax on those bills. If the contract is materially altered after 1 October 2025 (for example parties added, removed or exchanged, a change to the services, the parties' rights or obligations, the term, the contract amount or the period), it is taxable under retailing B&O and retail sales tax from the date of the change; a minor change such as a new notice email address is not an alteration. A seller that chose to report under retailing B&O from 1 October 2025 must also collect sales tax. A contract signed and fully paid before 1 October 2025 is treated as a sale before that date and is not taxed. Source: DOR existing contracts guidance.
5. Use tax. An Olympia business buys a $3,000 printer from an Oregon store that charges no sales tax and first uses it in Olympia: $3,000 × 10% = $300.00 use tax, reported on its excise tax return.
6. Food boundary. A grocery sells a packaged chocolate bar and a bottle of plain spring water. The chocolate bar is exempt food; the water is taxable bottled water.
7. Reseller permit misuse. A Seattle shop buys $1,000 of office supplies on its reseller permit. It owes $1,000 × 10.55% = $105.50 tax, plus a 50% penalty: $105.50 × 50% = $52.75.
8. Late payment. A $2,000 sales tax payment due 25 November 2026 arrives on 10 December 2026: $2,000 × 9% = $180.00 penalty, plus interest. Paid after 31 December 2026 but by 31 January 2027, the total penalty is $2,000 × 19% = $380.00; paid later still, $2,000 × 29% = $580.00.

Filing and payment

Due dates (DOR filing frequencies and due dates)

Frequency	Due date
Monthly	The 25th of the following month (the June return is due July 25)
Quarterly	The last day of the month after the quarter: April 30, July 31, October 31, January 31
Annual	April 15 of the next year

If a due date falls on a weekend or legal holiday, it moves to the next business day. Extensions must be requested before the due date (DOR late filing).

How to file

• File the combined excise tax return in My DOR. It carries retail sales tax, use tax, B&O tax and other excise taxes together.
• Report gross retail sales under Retailing B&O and on the State Sales and Use page, then enter sales by location code on the Local Sales page.
• Marketplace sellers: take the "Gross Sales Collected by Facilitator" deduction for facilitated sales; do not enter those sales by location.
• Remote sellers without B&O nexus: claim the No Local Activity deduction.
• A streamlined sales tax certified service provider may report sales tax for you, but you still file your own return for B&O tax.

Penalties (RCW 82.32.090)

Situation	Penalty
Tax on a return not paid by the due date	9% of the tax
Not paid by the last day of the month after the due date	19% in total
Not paid by the last day of the second month after the due date	29% in total
Minimum for each of the above	$5
Substantial underpayment found by DOR (paid less than 80 percent of the tax due, and the underpayment is at least $1,000)	5%
Assessment not paid by the notice due date	15% in total; 25% in total if not paid by the 30th day after it
Warrant issued for collection	10%, minimum $10
Doing taxable business without registering (not imposed if you register before DOR contacts you)	5%
Disregarding specific written instructions from DOR, or willfully disregarding the electronic filing and payment requirement	10%
Deficiency from a transaction DOR disregards	35% of the resulting additional tax
Intent to evade	50% of the additional tax

The late-payment, substantial-underpayment, warrant and unregistered penalties can each be imposed on the same tax. The evasion penalty cannot be combined with the written-instructions penalty or the disregarded-transaction penalty on the same tax.

Interest also runs on unpaid tax, at a rate that changes every year (DOR late filing). DOR can waive late penalties in qualifying circumstances.

ESSB 5814 penalty relief: for sales or use tax left unpaid because of the new service rules, DOR runs a temporary program that waives penalties (not tax or interest) for reporting periods from 1 October 2025 through 31 December 2026. For pre-existing contracts that had the temporary transition relief, penalty relief starts when the contract stops qualifying for that relief or on 1 April 2026, whichever comes first, and ends on 31 December 2026. Apply by 30 September 2027 through the Voluntary Disclosure Application and return the signed agreement within 30 days. Evasion, negligence and tax avoidance penalties are not covered. Source: DOR penalty relief program.

Records and time limits

• Keep records for five years, including copies of federal and state returns (RCW 82.32.070). A taxpayer who does not keep them cannot later challenge an assessment for that period in court.
• DOR cannot assess more than four years after the close of the tax year, except against a taxpayer that did not register, on fraud or misrepresentation of a material fact, or where the taxpayer signed a waiver (RCW 82.32.050).

Periods before 1 October 2025 (for amended or audited 2025 returns)

• Local rates differed by quarter: use DOR's rate history for the period of the sale, not today's table (DOR sales and use tax rates).
• Custom software, customization of prewritten software, IT services, website development, advertising, live presentations, security and temporary staffing were not retail sales before 1 October 2025. They were taxed under B&O only (DOR existing contracts guidance).
• Contracts signed before 1 October 2025: see worked case 4 for the transition.
• Software as a service and other digital automated services, digital goods and prewritten software were already taxable before 1 October 2025.

When to refuse or refer

• Refer B&O tax classification, rates, credits and apportionment beyond the basic point that B&O applies too.
• Refer cannabis, liquor, lodging, motor vehicle, car rental and tobacco taxes.
• Refer sales in Indian country or to tribes and tribal members: DOR is still consulting tribes on ESSB 5814 and tells vendors with tribal customers to request a ruling.
• Refer any ESSB 5814 case that is not clearly inside or outside DOR's lists (for example bundled professional and digital services, or mixed advertising packages). DOR's guidance is interim; questions go to DOR's rulings team. Do not advise a client to stop collecting because of the pending litigation.
• Refer voluntary disclosure for unregistered sellers with past exposure, and any audit, assessment or appeal.
• Refer Washington capital gains tax and other taxes outside this Guide.

Completion checklist

• Registration decided: physical presence, the more-than-$100,000 receipts test (all receipts, exempt and marketplace sales included), or domicile
• Every product line classified, including the ESSB 5814 services, the 1 July 2026 exclusions and the school and library exemption
• Each sale sourced by DOR's rules; exceptions (vehicles, towing, florists) checked
• Rate taken from the lookup tool for the correct quarter and location code
• Reseller permits and exemption certificates on file for every untaxed sale, kept five years
• Use tax self-assessed on untaxed purchases used in Washington
• Pre-October 2025 contracts reviewed for the transition dates
• Return filed in My DOR by the frequency's due date, with sales by location code and the right deductions
• Late items assessed for penalty and interest; ESSB 5814 penalty relief considered where it fits