Washington Plays the Name Game: Domain Name Registration Services Are Subject to Sales Tax

The State of Washington Department of Revenue issued public guidance explaining that the initial sale of a domain name by a registrar is subject to retail sales or use tax. A domain name is a unique name that allows users to access a website without using the website’s Internet Protocol (IP) address. Individual users cannot access the global domain name clearinghouse, but instead must use a third-party domain name registrar to purchase a domain name. Under Section 82.04.050(8)(A) of the Revised Code of Washington (Code), taxable retail sales include sales of digital automated services to consumers. A digital automated service is defined under Section 82.04.192(3) of the Code as “any service transferred electronically that uses one or more software applications.” In a prior determination, Det. No. 11-0081, 32 WTD 46 (2013), the Department determined that domain name registration services are digital automated services because the registrar transfers the domain name to the purchaser electronically. In this guidance, the Department makes clear that the initial sale of a domain name by a registrar is a digital automated service subject to retail sales and use tax. Washington Department of Revenue, Tax Topics: Domain Name Registration Services (May 7, 2015).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s