Hi, Paul Rafelson here from rafelsonlaw.com. How are you? I just wanted to set out this video real quick because something just came up with my clients and I think it’s important for everyone to know.
Washington State had sent my client a letter saying that he owes tax for 2018, he was very surprised to see that because Washington State was the first state to require Amazon to collect sales tax on behalf of all of its sales, all of this, you know, third party sales.
And so most people seem to think that the Washington State, it’s over there’s nothing else to do but that’s actually not true. Washington State has, you know, business and occupation tax, it’s a very small tax, I mean, well it’s a very small percentage applied to your gross receipts.
So depending on your Washington sales it could be big or small but for a lot of my clients it’s really not that much. It’s 0.0484% of your gross receipts but it’s not just the fact that you have to pay the tax, you have to file the Washington State sales and you know, tax return which is a nightmare.
You have to go through all of the different Washington zip code areas and fill out the tax form appropriately, and then at the end basically you say, you know, this is how much sales tax I owe and that should tie to what tax Amazon collect on your behalf, you’re going to take a credit for those taxes but what you’ll be left with is the B&O tax.
So, even though Washington State requires, you know, it has start sucking in on behalf of your obligations to file, a sales tax return as part of the B&O filing process has not gone away. So the burden is still there and you still have to pay the tax.
Now do I think you have to pay the tax? Well, I think there’s a lot of constitutional questions. I think there’s a lot of statutory questions whether you owe it but, you know, that’s a risk decision whether you want to deal with that right now or if you want to just comply.
But, for those of you who feel like they want to comply with the law that at least Washington State interprets that not necessarily high in my interpretation. But, for those of you that do, then you should know that form, that filing requirement is out there and obviously, you know, from my perspective this is just part of the burden.
This is one state’s burden out of, you know, every state that’s gonna require you pretty much to file something in all the cities and all the towns. So, but that’s sort of a bigger picture, but for again, for those of you who want to be compliant in Washington State, don’t want to deal with Department of Revenue, just want to apply into the radar, if that’s what you want to do, just be aware that it’s not just your sales tax obligation.
The money itself may be collected by Amazon, but your obligation to file, a, the b, tax and file tax return reflecting your sales tax collections through Amazon is still required. So please if you have any questions send me an email through paulrafelson.com, join my facebook group, “Amazon tax questions for merchant:s and please post and let us know any tax questions you might have there too and if you’re doing any legal issues whether it’s California or any other state or your trademark violation notices from Amazon or IP violations or you’re trying to get something trademarked, you’re trying get something patented I encourage you to reach out to me.
I work with some really great IP lawyers, ex-Microsoft like me, and great asset protection lawyers, corporate restructuring lawyers, M&A, whatever you need I encourage you to reach out [email protected] and let me help you whatever you need help with and this way you’re getting the, you know, top experienced people who really understand their craft and can help you through your issues. Thanks so much, have a great day.