Sales tax exemptions on sales of vehicles and trailers, watercraft, and farm machinery or implements have different requirements. See the links at the bottom of this page for more information.
Effective April 1, 2013, British Columbia (BC) replaced its Harmonized Sales Tax (HST) with a provincial sales tax. This does not change the fact that BC residents do not qualify for the nonresident sales tax exemption when shopping in Washington State.
Retailers that provide the exemption to BC residents are liable for any uncollected sales tax if audited.
A sales tax exemption exists for certain nonresidents of Washington State on purchases of tangible personal property, digital goods, and digital codes, that will be used only outside of this state. This exemption is only available to residents of states, United States possessions, or Canadian provinces where:
- There is no retail sales tax, use tax, value added tax, or gross receipts tax on retailing activities, or similar generally applicable tax, or
- The retail sales tax, use tax, value added tax, or gross receipts tax on retailing activities, or similar generally applicable tax is less than three percent.
(RCW 82.08.0273) (SB 5763)
Sellers are not required to make tax-exempt sales
Sellers are not required to make tax-exempt sales to nonresidents. However, sellers who choose to make tax-exempt sales must meet the requirements provided below under "Instructions to Sellers."
This exemption is only available at the time of purchase. Sellers are not required to make such exempt sales. If the seller chooses to collect the sales tax, buyers can not request a refund from the Department.
Only residents of the following states, possessions, and provinces of Canada qualify:
- New Hampshire
- Northwest Territories
- Yukon Territory
Dual Residents - Residents of a qualifying jurisdiction are not eligible for the exemption if they are also residents of Washington.
Eligible and ineligible sales
The law provides an exemption for sales that meet all three of the following criteria:
- The sale is of tangible personal property, digital products, or digital codes.
- The purchased item(s) will be used only outside of Washington State.
- The purchaser can establish resident status in a qualifying jurisdiction.
The exemption does not apply to charges for services that are included within the definition of the term "sale at retail" or sales of articles substantially used or consumed within Washington. This includes, but is not limited to:
- Lodging at hotels or motels.
- Repair services (except vehicle repairs where the parts portion is not taxable to qualifying nonresidents).
- Laundry or dry cleaning services.
- Automobile towing or parking.
- Amusement and recreational activities such as golf, bowling, and charter fishing.
- Personal services such as tanning, tattooing, and dating services.
- Meals or refreshments prepared for immediate consumption.
- Abstract, title insurance, or escrow services.
- Articles sold to:
- Persons in the military stationed within Washington.
- Nonresident students attending schools in this state.
- Any other nonresident temporarily residing in Washington.
Nonresidents must pay retail sales tax on purchases of marijuana
Marijuana sales to nonresidents are subject to retail sales tax. Sales of marijuana, useable marijuana, and marijuana infused products, including marijuana concentrates, are excluded from the limited nonresident sales tax exemption.
For more information, see our Special Notice: Recreational and Medical Marijuana – Repeal and Clarification of Excise Tax Deductions, Exemptions, and Preferential Rates.
Instructions to sellers
Sellers making exempt sales to eligible nonresidents must:
- Examine one piece of identification that establishes proof of nonresidency at the time of purchase. The identification must be a valid driver's license issued by the jurisdiction in which the out-of-state residency is claimed or a valid identification card issued by the out-of-state jurisdiction. The identification must: A) bear the photograph of the holder, B) show the holder’s residential address, C) identify the holder’s name, and D) be issued for the purpose of establishing residency.
- Maintain a record of the type of documentation accepted as establishing nonresidency in (1) immediately above, including identification numbers, expiration dates, the purchaser’s name, and the purchaser's state of residency.
A seller may accept from the purchaser a properly completed Streamlined Sales Tax Exemption Certificate. The certificate must include the purchaser’s driver’s license number or other state-issued identification number and the state of issuance; or the seller may capture the relevant data elements as allowed under the Streamlined Sales and Use Tax Agreement.
- Record the documentation accepted as establishing nonresidency on the invoice or other written evidence of sale and retain the information or maintain a legible photocopy of the documentation establishing nonresidency as part of the seller's accounting records for the statutory period of five years (refer to RCW 82.32.070). In the case of a seller making cash sales without issuing invoices (for example, retail hardware stores) and maintaining a log, such a log must identify the date and amount of sale, and the information described in (2) immediately above or, in the case of corporate nonresidents, the corporate nonresident permit number.
- Presume that the item being sold will be used in Washington and is subject to retail sales tax if the purchaser requests the seller to deliver the merchandise to a Washington address. This presumption may be overcome if the purchaser gives the seller a signed written statement explaining the reason for delivery to a Washington residence and a specific statement indicating the item will not be used in Washington
Additional information can be found in Excise Tax Advisory
Specific retail sales tax exemptions and documentation requirements exist for: