Washington compliance for Etsy sellers

Research steps and summary:Steps taken

Research steps and summary:Steps taken

Performed broad web searches focused on Washington state compliance for Etsy sellers (marketplace facilitator rules, sales/use tax, B&O tax, registration thresholds, local licensing, delivery charges, reporting, and resources) using the search_and_extract tool.

Retrieved and extracted authoritative Washington Department of Revenue pages using the extract_engine_tool, targeting these specific pages

Marketplace Sellers, Marketplace Facilitators, Out-of-State Businesses (reporting thresholds and nexus), and Business & Occupation (B&O) tax. Attempted to fetch Etsy Help Center guidance but the specific Etsy tax article URL returned a missing page; recommend checking Etsy’s Help Center directly for the platform’s current statements.Key findings (what an Etsy seller selling tangible goods to Washington customers needs to know)

Economic/registration thresholds and nexus- Washington requires remote marketplace sellers to register to report B&O tax and collect/submit applicable sales tax if, in the current or prior year, either

(a) the seller has more than $100,000 in combined gross receipts sourced/attributed to Washington, or (b) the seller is organized or commercially domiciled in Washington. (Includes exempt sales when calculating the threshold.)- If you have physical presence nexus in WA (inventory, employees, office, etc.), you must register regardless of thresholds.- Use the Business License Application to register and obtain a UBI/Account ID; many cities/counties may have separate licensing requirements.

Marketplace facilitator rules and Etsy’s role- Washington defines marketplace facilitators broadly (contracts with sellers, communicates between buyer and seller, and performs activities like payment processing, fulfillment/storage, listing, setting prices, branding, order taking, customer service, returns).- Marketplace facilitators (e.g., Etsy) that collect and remit sales tax for sales made through their platform relieve sellers from collecting sales tax on those marketplace sales—provided the facilitator can show it collected the tax and issues required monthly reports to sellers.- Even when a facilitator collects sales tax on marketplace sales, sellers still must file Washington excise returns to report B&O tax and must report gross Washington retail sales under Retailing B&O. Sellers should claim the “Gross Sales Collected by Facilitator” deduction on their Washington returns for those sales.

Reporting, filing and taxes due- B&O tax

Washington’s B&O tax is a gross receipts tax (no deductions for costs). Rates vary by classification; sellers generally report under the Retailing B&O classification.- Filing frequencies (assigned by DOR based on tax liability): Monthly returns are due on the 25th of the following month; quarterly returns are due by the end of the month following the quarter; annual returns’ due date changed to April 15.- Sellers must use DOR tools to source sales (destination-based) and determine correct local tax rates; delivery charges are taxable if the items shipped are taxable.4) Practical compliance steps for Etsy sellers- Track all sales to Washington customers (marketplace and direct) to monitor the $100,000 economic nexus threshold. Include exempt and resale sales in the calculation.- Check whether Etsy is collecting/remitting Washington sales tax on your marketplace sales (Etsy typically is treated as a marketplace facilitator in many states). If Etsy collects tax, obtain and retain the monthly marketplace reports Etsy provides; use them to report B&O and to claim facilitated-sales deductions on your return.- If you have any physical presence in WA (inventory stored in a 3PL/fulfillment center, pop-up events, employees), register immediately and begin collecting and remitting tax as required.- Register via Washington Business License Application / My DOR portal to get UBI and filing information; apply for a reseller permit if you buy goods tax-free for resale.- Maintain records per DOR recordkeeping rules and keep copies of marketplace reports (monthly), sales records, reseller permits, and exemption certificates.- Check local city/county business licensing requirements (Seattle, Tacoma, Spokane, etc.) in addition to state registration.- Contact DOR Marketplace Fairness email/phone for specific questions: DORMarketplaceFairness@dor.wa.gov and 360-704-5900.Gaps and next recommended steps- Confirm Etsy’s current marketplace tax collection policy via Etsy Help Center and download the monthly reporting exports from Etsy for any Washington sales. (Attempted to fetch a specific Etsy Help Center page; the URL returned a missing page—recommend manual verification on Etsy’s Help Center.)- For city-level licensing and taxes, check city websites for sellers operating physically or holding inventory in Washington cities.