Determining sales tax rates is not most people’s cup of tea. But as a small business owner in Washington who has customers who receive merchandise in various locations, it is important to be sure you are charging the correct sales tax rates.
Washington is a “destination-based” state, meaning that the sales tax rate is determined by the location where the customer receives the merchandise. This is especially important if you are a contractor or business who travels to your customer’s location to complete a job. If you fall into this category, always be sure you record your job/customer address when creating an invoice, and use that address to determine the sales tax rate. Older versions of QuickBooks Online do not have automatic sales tax, so you will need to update the rates yourself. Washington businesses can find the most updated rates on the Department of Revenue website (dor.wa.gov). Navigate to ‘Taxes and Rates’ once you get to the website.
DOR gives several options for finding the rate(s) you are looking for. It’s a good idea to familiarize yourself with all of the tools so you’ll know exactly where to look when you have a sales tax rate question. If you are unsure whether your business is handling sales tax collection & reporting correctly, we are here to help!