Washington State Institutes Online Sales Tax
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The state of Washington started taxing online purchases yesterday. Unlike the New York affiliate tax, Washington isn’t throwing affiliate marketers under the bus.
According to Washington Revenue Department spokesman Mike Gowrylow, the state law, which passed in 2007, has two major effects.
The first is that Washington is joining a national online sales-tax effort. The second is that Washington’s own tax system is changing from origin-based to destination-based for shipped goods. That is, tax will be collected based on the location of the buyer, not the location of the seller.
“This is a necessary evil. In order to join the national effort, we had to harmonize our sales tax with other states,” Gowrylow said. “We believe this is the cleanest, fairest way to do this.”
So, all affiliates can expect diminished returns for the traffic to Washington state residents. At least Washington affiliates won’t be getting the boot in this arrangement.
You can find out more about the National Internet Sales Tax (S1433, the “Sales Tax Safety Net and Teacher Funding Act”), introduced by Senator Fritz Hollings (Democrat, South Carolina) in July 1999, at http://www.businessknowhow.com/money/InternetTax.htm.
- Posted in Affiliate Managers, Affiliate News
5 Comments
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On July 9 @ 8:21 am posted[...] Washington State Institutes Online Sales Tax – Washington State hops in line as the next state instituting an online sales tax – fortunately it’s more affiliate friendly than New York. [...]
I thought I'd save my comment for the 4th of July…it seems more appropriate.
This even worse than what NY did in the bigger scheme of things, IMO. It seems even more unconstitutional to me. It's taxation without representation and as mentioned in your quote a part of a much larger movement with regards of taxing internet sales.
But think about it. I buy something for say Angel and have it shipped directly to him. I am chareged sales tax because he lives in WA. I don't live in WA. I have no voice in electing WA legislatures nor voting on sales tax legislation. My tax dollars go to a state I don't live in and don't go towards public services I might benefit from.
As someone living in La why do I assume tax liability in WA?
reply to this commentAgreed – nothing good about it.
Taxing an out-of-stater that wants to send a gift is wrong, and seems a greater, more offensive reach.
I'm wondering if you could get double-taxed if you purchase from a company that has a nexus in your state and ship to WA?
reply to this commentThe potential for double tax occurred to me as well.
Some other random thoughts I've had. It basically is taxation based on HOW you place an order. So I can buy something from Fingerhut, LillianVernon, WalterDrake or such and possibly have to pay sales tax online. But if I place the order through their catalog or phone it in I don't? How long before consumers figure that one out, especially in today's economy?
We've already seen how some merchants reacted to the NY tax. And 18 other states are already doing what WA just did according to the SeattlePI article. And more have something in the works. Merchants reacted to NY tax as they did because of the perception ofburden it placed on them, whether accurate or not.
Of course it's states seeing billions in online sales and wanting a piece of that revenue.
I find all of this, particularly the national movement of it, quite disturbing. And if it succeeds with online sales, who/what will be the next target?
reply to this commentThe potential for double tax occurred to me as well.
Some other random thoughts I've had. It basically is taxation based on HOW you place an order. So I can buy something from Fingerhut, LillianVernon, WalterDrake or such and possibly have to pay sales tax online. But if I place the order through their catalog or phone it in I don't? How long before consumers figure that one out, especially in today's economy?
We've already seen how some merchants reacted to the NY tax. And 18 other states are already doing what WA just did according to the SeattlePI article. And more have something in the works. Merchants reacted to NY tax as they did because of the perception ofburden it placed on them, whether accurate or not.
Of course it's states seeing billions in online sales and wanting a piece of that revenue.
I find all of this, particularly the national movement of it, quite disturbing. And if it succeeds with online sales, who/what will be the next target?
reply to this comment