Make sure you keep good books and records for your business. See WAC 458-20-254(3)(b) and RCW 82.32.070
For instance, if you make sales within Washington and also make substantial sales outside Washington, you will want to be able to demonstrate this with the records you keep. If you use invoices, make sure the “ship to” address is used and actually has an out or state address in it.
“RCW 82.32.070 requires every person liable for payment of excise taxes to keep and preserve suitable records in order to determine the amount of any tax for which the taxpayer may be liable. This includes records that will demonstrate the amount of gross receipts and sales from all sources, the amount of all deductions, exemptions, credits, and refunds claimed, and the payment of retail sales tax or use tax.” WAC 458-20-254(3)(b).
If you can’t prove that the sales were made outside of Washington, then the Washington Department of Revenue is very likely to find that they were made inside Washington and assess the retail sales tax on it. If you didn’t collect the tax from the purchaser, then you will be liable to pay for it. This can really add up, especially when the Department of Revenue adds on penalties and interest.
If you are in a situation like this, and would like to discuss it with a Washington state Tax Attorney, click on the button below:
