Digital goods and services for business purposes

From the 2024 DOR Tax Exemption Study

Det. No. 15-0167, 35 WTD 71 (February 29, 2016) 80 b. Sourcing wholesale sales of digital automated services RCW 82.04.257 gives the B&O tax rates for the retail and wholesale sales of digital automated services, and discusses when sales of digital automated services are subject to B&O tax. [Subsection] (3) states: . . . a person is considered to be engaging within this state in the business of making sales of . . . digital automated services . . . if the person makes sales of . . . digital automated services . . . and the sales are sourced to this state under RCW 82.32.730 for sales tax purposes or would have been sourced to this state under RCW 82.32.730 if the sale had been taxable under chapter 82.08 RCW As mentioned above, “[s]ale at wholesale” or “wholesale sale” means “[a]ny sale, which is not a retail sale, of digital goods, digital codes, or digital automated services.” RCW 82.04.060(1)(h); Rule 15503(502). Taxpayer has made wholesale sales of digital automated services, which would have been retail sales were they not resold. These sales “would have been sourced to this state under RCW 82.32.730” if they were not resold, and are thus subject to wholesaling B&O tax. This l