For instance, if you buy a piece of furniture that is shipped from a warehouse in Auburn and have it delivered to Seattle, you will pay the local sales tax rate applicable in the City of Seattle. In other words, the tax rate that is owed depends on the location of the sale/delivery, not the location of the business or shipping warehouse. Since 2008, Washington has used the destination-based sales tax system, also known as the “streamlined sales tax.” Under this system, the point of sale (the location where sales tax is calculated) is considered to be the point of delivery or where the buyer receives or takes possession of the merchandise (i.e. For simplicity’s sake, we will refer to “retail sales and use” taxes as “sales taxes” unless otherwise noted.
(There are many other types of special purpose districts that do not have sales tax authority and must rely on other revenue sources such as property taxes or user fees and charges.)įor those local government entities with sales tax authority, sales taxes are typically the largest or second-largest source of revenue (the other usually being property taxes). Retail sales taxes ( chapter 82.08 RCW) and use taxes ( chapter 82.12 RCW) are an important revenue source for many local governments in Washington – specifically cities, towns, counties, transit districts, and public facilities districts.
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