As of July 1^st 2008, Washington State has joined 21 other states in passing a STREAMLINE SALES AND USE TAX AGREEMENT.  The agreement simply states that Washington State has changed from an origin based sales tax to a destination based sales tax.  This ruling encompasses retail sales as well as service related products. 

Senate Bill 5089, Section 1004, Item 3c (page 44) specifically mentions credit reports as a service product which will be affected by this bill.  ARC will be required by Washington State to charge sales tax on any credit report for a borrower located in the Washington State, effective July 1^st 2008.

What is the impact?

Credit reports are taxable based on your borrower’s location.  If you are currently an ARC client ordering credit reports on borrowers located within the Washington State REGARDLESS of your place of business, then you will begin seeing sales tax on your credit reports. 

What are your options? 

Avoid Sales Tax on Credit Reports – if you plan on re-selling credit reports or have your borrowers pay for a credit report - please sign the attached Washington State Department of Revenue Resale Certificate which would avoid ARC placing a sales tax on every credit report.  The resale certificate must be signed either by; principal, officer, or broker of record.

Incur Sales Tax on Credit Reports – If you do not plan on charging your borrower for the credit report then effective July 1^st 2008 you will begin seeing sales tax on all your credit reports.

If you need an additional copy of the Washington State Department of Revenue Resale Certificate click here.  Or if you would like to read Senate Bill 5089 please click here.

Based on a survey we did in March 2008 it appears that most of you will be opting for the resale certificate.  This resale certificate must be signed and returned to ARC (Attn: Accounting Dept.) no later than July 1^st 2008. 

We appreciate your understanding in this matter, and we thank you again for your continued support.

ABOUT ARC:
American Reporting Company is based in Kirkland, Washington and offers the lending community intelligent solution, reliable products and exceptional service. ARC has been a credit reporting agency since 1987. Contact us at credit@arcreports.com or call 1-800-992-1058 for more information about ARC credit products.