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New services subject to sales tax starting Oct. 1
OLYMPIA, Wash. – Aug. 13, 2025 –– The Department of Revenue is sending letters and digital alerts notifying customers of a possible change in their tax reporting requirements due to recently adopted legislation. The change is effective on Oct. 1 and will impact over 90,000 businesses.
Engrossed Substitute Senate Bill (ESSB) 5814 significantly expands business activities subject to retail sales tax. Under the new law, some business services will now fall under the definition of "retail sale" and be subject to retail sales tax including:
- Information technology services
- Custom website development services
- Investigation, security, and armored car services
- Temporary staffing services
- Advertising services
- Live presentations
- Sales of custom software and customization of prewritten software
- Modification of digital automated services (DAS) exclusions
The agency is urging businesses involved in these activities to visit the Revenue website for more information on these changes.
