The Washington State Department of Revenue (DOR) has offered guidance for businesses who wish to use a direct pay permit in the state. Taxpayers who expect a cumulative liability of $240,000 or more in the current calendar year or who make over $10 million in taxable purchases in one calendar year may apply for a direct pay permit from the state by sending a letter of interest to the DOR. This letter should include information about the business such as name and account ID as well as affirmations the business has met one of the eligibility requirements and is familiar with how the accrual and compliance process requirements function for use tax. Once the application letter is received, the DOR will review and verify requirements, which may lead to them contacting the business for an interview. Once the review is complete, the business will receive a letter either granting or denying the permit. If the application is denied, the business may petition for reconsideration by the DOR.
Once issued, direct pay permits may be used to claim a deduction for retail sales tax for five years, but permits may not be assigned to a third party and do not transfer to affiliates. The permit may be copied and used for multiple purchases with any individual vendor. Businesses with direct pay permits must report use tax due in the reporting period when the business receives the goods or services they are reporting for.
Businesses who wish to take advantage of the direct pay permit program should take the time to familiarize themselves with the requirements for use set up by Washington state to ensure they are using their permit correctly and appropriately, and should note that there are many situations where a direct pay permit cannot be used, such as when a reseller permit should be used instead, or for certain services, such as telephone or amusement services. For businesses who can take advantage, direct pay permits great a business a great opportunity to have full visibility on their use tax and allow taxpayers to consolidate records in house. (Washington State Department of Revenue Direct Pay Program, https://dor.wa.gov/forms-publications/publications-subject/tax-topics/direct-pay-program, accessed 31 December 2025)