Legislation (House Bill 2163) that significantly affects remote retailers, electronic marketplace operators, and others making and facilitating sales to Washington State consumers was signed into law on July 7, 2017.
At the outset, House Bill 2163 notes that Washington State and its local governments will “lose out on” an estimated $353 million in sales and use taxes in fiscal year 2018 from remote sales, reducing funds that would otherwise be available for public education, health care, infrastructure, and other vital public services. To address this “significant harm and unfairness” resulting from the Quill physical presence nexus rule, House Bill 2163 adopts a “new program” that applies to remote sellers, “marketplace facilitators,” and so-called “referrers” effective January 1, 2018.
The program is framed as an “election”—a remote seller meeting a specified threshold of gross receipts from retail sales into Washington must elect either to collect retail sales or use tax on taxable retail sales or to comply with certain sales and use tax notice and reporting provisions. This new requirement also extends to marketplace facilitators that facilitate sales on behalf of third-party remote sellers as well as referrers.
Read a July 2017 report [PDF 192 KB] prepared by KPMG LLP
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.