Understanding Destination-Based Sales Tax in Washington State

If you’ve ever purchased something in Washington and noticed the sales tax rate seems to vary depending on where the sale happens, you're not imagining things. Washington State uses a destination-based sales tax system, which means that the total sales tax applied to a transaction depends on where the buyer receives the product or service, not where the seller is located. This can impact both businesses and consumers, especially in online and delivery-based purchases.

What Is Destination-Based Sales Tax?

In the U.S., states can choose how they apply sales tax. Some states use an origin-based system (tax is based on where the seller is located), but Washington uses a destination-based model. Under this system, the sales tax rate is determined by the delivery location—in other words, where the buyer receives the goods or services.

So, if you buy a product from a Seattle-based business and have it delivered to Spokane, the sales tax rate that applies is Spokane’s, not Seattle’s.

Why Does It Matter?

Washington has a statewide base sales tax rate of 6.5%, but local jurisdictions (cities, counties, and special taxing districts) can add their own rates on top of that. As a result, the total sales tax can range from about 7% to over 10%, depending on the delivery address.

For example:

• A purchase delivered to Seattle might have a total sales tax of 10.25%

• The same item delivered to Yakima might have a total tax of 8.2%

This means that for businesses—especially those that ship goods—it’s crucial to charge the correct local rate based on the delivery address, not just where their business is located.

How Does This Affect Businesses?

Businesses, especially online retailers and service providers, need to be careful to:

• Determine the correct tax rate based on the destination

• Collect and report sales tax accurately for each jurisdiction

• Use tax rate lookup tools provided by the Washington Department of Revenue to stay compliant

Washington provides resources like the Sales Tax Rate Lookup Tool and GIS-based tax rate maps to help businesses find the correct rates. You can download a mobile tax rate app.

What About In-Store Purchases?

If you're buying something in person and taking it with you, the sales tax rate is based on the store’s location because that's the destination of the sale. So destination-based only kicks in when the product is delivered somewhere else.

Washington’s destination-based sales tax system means the tax you pay depends on where you receive the product, not where it's sold. This helps ensure local governments get the appropriate revenue, but it also puts more responsibility on businesses to apply the right tax rates. If you’re a business owner or online shopper in Washington, understanding this system is key to avoiding surprises.