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You both just have to fill out your respective sections of a form 1
This should be a form 4 not form 1. form 1 is for making a suppressor. form 4 is for taxable transfer.
and it is correct that for instate is fine, if out of state you must transfer through an FFL.
what if I buy my suppressor in WA, then move to Oregon. Can I sell it to oregon folks?
If you move to Oregon (i.e. a change of residence) you need to fill out a 5320-20 with your new address.
And once you are a resident of Oregon, you can then sell face to face to another Oregon resident.
You can still sell to an Oregon resident if you are a Washington resident, but you'll need to go through an Oregon dealer, and it's a 2 stamp process.