by Sheryl at Pretty-And-Plus

Earlier this year I was told by my accountant that as of July 1, 2008, eBay Sellers in Washington State will have to charge sales tax to Washington internet buyers according to the buyers residence, and not by the sellers residence.  This is a huge change for us as you can imagine. 

I immediately sent out a plea to the eBay Community for input.  Unfortunately, all but one of them just told me to fire my accountant.  However, unless you live in Washington State whose congress has passed such a law, it is probably best not to jump to conclusions and give false advise.  I also am advised that several states are also considering passing such a law, so now is the time to prepare.   Our eBay Political Action Group told me to write my congressman, but the law had already been passed for Washington State.  Maybe it's not too late for the rest of you eBayers.

My Accountant was correct.  Here is a summary of what is required.  This is straight from the Department of Revenue.

"On July 1, 2008, Washington retailers that ship or deliver goods in Washington State must change the way they collect and remit sales tax.  The destination-based sales tax requires businesses to collect tax based on the rate at the location where the buyer receives the merchandise.  Currently, tax is collected based on the location of the seller."

So here is how I have decided to handle my Washington State eBay sales.  It's a very manual entry, but since we can't expect eBay to do a tax charge by the buyers zip code,  here goes. 

First, I have changed all my listings to NOT REQUIRE instant payment.  This will give me a chance to enter the correct sales tax on the invoice according to their zip code given.  Looking on the bright side, you can also encourage multiple sales this way to save on shipping.  On those few Washington buyers that pay instantly without my invoice, I'll have to pay any difference out of my profit.  On my blouses, that is not such a big difference, however some of you who have big ticket items, you may not want to do it this way.

There is a form provided by the Department of Revenue titled "Local Sales & Use Tax Rates & Changes" dated 2-12-08.  This form breaks down by Washington Counties with same tax rate (Unicorp Areas) and specific cities with different tax rates.  You can obtain this brochure online:
Go to - www.dor.wa.gov
Click "Find a Sales Tax Rate"
"Tax Rate Look Up Tool"
Enter Address & Amount of Sale
Click calculate
The result will be the Location Code and the Tax Amount.  You will need both to report the taxes later.

There is also a specific downloadable file with tax rates and location codes by ZIP+4 in Quick Books or Excel Format.  You can obtain this file by calling Tracye Fralick at (360) 902-7016 or emailing her at tracyef@dor.wa.gov. 

I also understand that workshops have been going on since April across the state. To sign up for a workshop go to:  destinationtax.dor.wa.gov and click on "Attend a workshop."  To request a speaker for your group contact Rick Stedman at rickst@dor.wa.gov or call (360) 705-6624.

There are also some businesses that can take advantage of a customer database conversion service (a business sends a file of addresses to DOR and receives location codes and tax rates for its customers with repeat sales from the same customers.  You can also get this tool by contacting Tracye Fralick (see above).

Friends, if this guide has been helpful to you, please click on your positive response below.  It will help me sell more blouses :-)

Here's a parting thought:  Laughter dulls the sharpest pain and flattens out the greatest stress. 
"Ulcers can't grow while you're laughing" Hunter Adams