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Tough Economic Times, 9.5% Sales Taxes…
Add those together and you start looking for ways to reduce your costs for technology acquisition. What some companies are doing is purchasing equipment online and/or from companies outside of Washington State so that they don’t have to pay Sales Tax on equipment. For a $10,000 purchase, this saves the purchaser $950 – not exactly chump change. Recently I’ve seen promos where out of state vendors tout this sales tax savings as a reason for doing business with them.

So, What’s the Catch?
It’s true. For online our out of state purchases, you don’t have to pay Washington State Sales Tax. However, what a lot of people don’t know is that you’re still responsible for paying Use Tax on those purchases. So, how much is Use Tax? You guessed it – the same amount as the Sales Tax. Not only are buyers responsible for Use Tax, they are responsible for reporting it to the State of Washington Department of Revenue.

I am not a Lawyer, …
… and I don’t play one on TV. (But we do have more and more attorneys as clients and happy Mac and OS X Server users!). But I can direct you to the authority on the subject, which is:

The Washington State Department of Revenue Webpage on Use Tax

If you had any doubt about whether or not an internet purchase is taxable, this excerpt should clarify things for you:

Goods are purchased out of state by subscription, through the Internet, or from a mail order catalog company. Many of these companies collect Washington’s sales tax, but if the company from which you order does not, you owe the use tax.

The Doctrine of Wilford Brimley

Our Ethical Muse

One of my Attorney friends once said that when confronted with an ethical dilemma, one should invoke the Doctrine of Wilford Brimly, which encourages the decision maker to make the correct choice:

“Because it’s the right thing to do.”

That pretty much sums it up. So, the answer to the question posed in the title of this post is, “You pay Use Tax” or risk the wrath of the State of Washington. While you may be tempted to buy computers, software, networking infrastructure, and other equipment online to save Sales Tax, please keep in mind that you’re still responsible for paying Use Tax on the purchase. Also, purchasing these things through Iris Professional Services supports a local business like your own.

One way to save on tax would be to outsource as well. Take a look at OutsourcingTip.com for some helpful info on how to outsource your project.