Billing for Sales Sourced to Washington State (WA)

Washington State Sales Tax

This page addresses sales of goods and services to individuals, groups, or external entities that are sourced to WA. The sales tax on individual line items need to be accounted for and collected from those customers.

  • Determining tax rate and location code: Before entering a bill into EFS that is sourced to WA, a determination of taxability for each line item will need to be made along with the tax rate and location code.
  • Billing procedure for collecting WA sales tax: When entering a bill with WA sales tax there is additional information that needs to be recorded in order to collect sales tax from the customer. An emphasis needs to be on the Ship To and Ship Loc fields, recording the tax rate, tax amount, and Location Code.

Determining tax rate and location code

Complete these steps before entering a bill into EFS to determine the tax rate and Location Code.

1. Identify the item or service being sold. 

2. Consult Job Aid – Sourcing Transactions for Sales Tax to apply sourcing rules to determine ship to state. (This Job Aid is on the Tax Management Office website > TMOGs & Other Resources > Job aid for Sourcing Transactions for Sales Tax.)

  • If the ship to state is Washington (WA), continue with the steps 3-5 outlined below.
  • If the ship to state is NOT Washington (WA), proceed to enter the bill according to the instructions outlined in the Create Bills Manual and Creating a Bill Job Aid.

3. Determine whether the customer is exempt from paying sales tax in the state of Washington (WA). Does the customer have a Washington tax exemption certificate on file or do they have one to submit? (Each state has its own tax exemption rules. If there is no tax exemption certificate on file, the University needs to collect sales tax. The best practice is to ask the customer if they are exempt from paying sales tax.)

  • Send any newly submitted tax certificates to Accounts Receivable Services via UM Maintain Customer Request.
  • If the customer is exempt from paying sales tax in the state of Washington (WA), skip steps 4-5 and proceed to enter the bill.
  • If there is no tax exemption certificate on file, continue with steps 4-5 to determine the sales tax that will be added to the bill.

4. Determine the taxability of the good/service sourced to WA. Consult the Tax Management Office ([email protected]) for assistance in determining if the good or service being provided is subject to sales tax in the state of Washington (WA).

5. Go to the Washington State website to determine Tax Rate and Jurisdiction (check at least quarterly).

  • a. Enter Street Address, City, Zip, and Taxable Amount.
  • b. Click Search.
  • c. Scroll down on the webpage to view results.
  • d. Note 4 digit Location Code, Total tax rate, Tax Due, and Total Due. This information will be entered into EFS.
Partial screen grab of Washington State Tax Rate Lookup page, showing the address search tab, map search, tab, and latitude/longitude search tab. The Address Search is displayed, with fields for Street Address, City, ZIP, and taxable amount. A reset and a search button are also displayed within the partial screen grab.
Partial screen grab showing the searched address, time period, with 3 tabs of options: sales & use, motor vehicle sales/rentals, and lodging. The sales & use tab is displayed showing the location code, total tax rate, taxable amount, tax due, total due for a sale (rate .0125, taxable amount $100, tax due $10.25, total due $110.25).

Billing procedure for collecting WA sales tax

Step-by-step procedure to create an EFS invoice containing goods/services to collect WA sales tax.

Steps 5 and 11 are new/updated!

1. Navigate to: Billing > Maintain Bills > Standard Billing > Add a New Value

2. On the Add a New Value tab, enter the following:

  • Business Unit = UMN01
  • Bill Type Identifier = 001 – Standard – Non Sponsored
  • Bill Source = your college/cluster code
  • Customer = customer ID
  • Click Add

3. Header – Info 1 page

  • Double check the Invoice Form, Bill Inquiry Phone, and Billing Specialist fields. Update as needed.
  • Click Next

4. Address Info page

  • Check for correct Attention To (contact) and Bill-To Location. If not correct, select correct values.
  • Click Next

5. Header – Order Info page – enter the following:

  • Enter PO Ref, Contract, Order No, Order Date if applicable.
  • Ship To = enter ship-to customer ID
  • Ship Loc = enter ship-to location
    The values entered for Ship To and Ship Loc should answer the question, "Where did the sale occur?" To determine where the sale occurred, consult Job Aid – Sourcing Transactions for Sales Tax. If goods are picked up from or services performed at a University location, use Ship To Customer UMN0001 and the location corresponding to the University campus or office.
  • Click Next.

6. Header – Note page

  • Enter header notes as needed
  • Click Next

7. Line - Info 1 page – enter the following:

  • Select identifier (charge code) 
    Use a specific identifier or charge code for the goods/services being sold. This assists with data entry, clarifies what is being sold, and aids with reporting.
  • Update description
  • Enter Qty
  • Enter Unit Price
  • Click Next

8. Line – Note page

  • Enter line notes as needed to fully describe the goods or services
  • Click Next

9. Revenue Distribution page – enter the following:

  • Fund = fund associated with the activity
  • DeptID = department ID associated with the activity
  • Program = program associated with the activity
  • Project = leave blank
  • Account = account associated with the activity
  • FinEmplID = populate as required
  • ChartField 1 = populate as required
  • ChartField 2 = populate as required
  • Amount = fills in automatically
  • Disregard all other fields. 
  • Click Next

10. Repeat steps 7-9 for each additional bill line

11. Enter one additional bill line to account for the sales tax

  • Line – Info 1 page – enter the following: 
    • Identifier (Charge Code) = Select 000-SALES_TAX_WA (WA State & Local Tax ##.##%) 
    • Description = Update the Description to include tax percentage (replace ##.##% with the tax percent to be charged)
    • Qty = 1
    • Unit Price = total tax amount for all taxable lines on order
    • Click Next
Bill line screenshot highlighting four fields: Identifier, Description, Quantity, and Unity Price.
  • Line – Note Page
    • Enter 4 digit Location Code as an internal only note using the following format: Location code: ####
    • Click Next
Screenshot of Bill Line screen, Bill Line Note area. Highlighting the "Internal Only Flag" checkbox, showing it selected/checked; and highlighting the Note Text field, containing the text, "Location Code: 1726" (some example text).
  • Revenue Distribution page – The ChartField string for the ‘WA State & Local Tax’ Identifier will pre-populate. DO NOT CHANGE.
  • Click Next

12. Header – Info 1 page

  • Change the Status to RDY
  • Click Save