As of January 1, 2018, Washington’s Marketplace Fairness Act requires remote sellers, marketplace facilitators, and referrers that meet certain statutory criteria to do one of the following:
The legislation specifies that failing to meet this requirement could result in significant penalties. However, businesses that voluntarily register with Washington by June 30, 2018, to comply with Washington tax laws and pay prior tax obligations may now receive certain benefits through the Washington Marketplace Fairness Penalty Reduction Program.
Remote sellers, marketplace facilitators, and referrers with a physical presence in Washington are affected by the legislation as well as the following:
For more information on the Washington Marketplace Fairness Act, see our previous Alert.
Businesses that voluntarily register for the program by June 30, 2018, may be eligible to receive the following benefits.
Penalty Reductions
The following penalties currently apply; however, they may be reduced for eligible businesses.
Reduced Look-Back Period
The tax periods will be limited to the prior four calendar years plus the current year, which is applicable to the extent the taxpayer has other tax obligations owing that are incremental to marketplace fairness-related tax matters.
Eligibility
Businesses that have a Washington State tax obligation and meet certain other criteria can be eligible for the program. However, the program doesn’t apply to penalties imposed for failure to comply with use tax notice and reporting requirements.
In order to qualify for the Marketplace Fairness Penalty Reduction Program a business must:
Businesses that have collected and unremitted sales tax are ineligible for the benefits of the program.
Application Process
To participate, taxpayers must:
Each entity, regardless of affiliation, must go through the application process separately.
For more information about how the Marketplace Fairness Penalty Reduction Program may affect you or your business, contact your Moss Adams professional or email statetax@mossadams.com.