The legislation is unique because it grants online retailers two options for sales tax disbursement to the State of Washington:
- The online retailer can collect and remit the sales tax at the time of purchase; or
- The retailer can notify the State of Washington that the consumer has an outstanding sales tax obligation whereby the consumer must self-remit the sales tax to the Department of Revenue.
HB 2163 establishes an economic nexus threshold of $10,000. The measure defines “marketplace seller” as a seller making retail sales through any physical or electronic marketplaces operated by a marketplace facilitator. The legislation also defines “platform” as an electronic or physical medium including a website or catalog.
The legislative leadership took this unique two-tiered approach because they are concerned with the pending South Dakota Economic Nexus MFA bill which challenges the 1992 Quill decision by the U.S. Supreme Court. The Supreme Court is expected to review the South Dakota case next year. Regardless of the final decision by the Court, Washington State will be able to collect sales tax from on-line retailers for the foreseeable future.