Third-Party Activities Establish Sales Tax Nexus in Washington

• Third-party representatives performing in-state activities can create sales tax nexus in Washington
• Recent focus has been on economic nexus but physical presence still relevant for establishing sales tax nexus
• Washington Tax Determination highlights the importance of physical presence through third-party activities
• A wholesaler without physical offices or employees in Washington sent representatives to meet with retail store customers
• The wholesaler’s website advertised local retailers for repairs which contributed to physical presence nexus
• Washington Department of Revenue investigated the wholesaler for not remitting sales tax and not paying B&O tax from 2012 to 2018
• The wholesaler met economic nexus thresholds but disputed the physical presence conclusion by the Department
• Activities by independent contractors that are significantly associated with a taxpayer’s market presence in a state can create nexus
• Activities like meeting customers and providing services related to products sold help establish or maintain market presence in Washington

Source: aprio.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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