Live presentations: New exclusions from retail sales

Intended audience: Businesses, organizations, and individuals offering live presentations for a fee.

Starting Jul. 1, 2026, the exclusions from the definition of retail sales of live presentation are expanded.

What are the new exclusions?

The new exclusions from retail sales of live presentations include:

• Before and after school care provided in-person and on-site by elementary schools.
• Presentations given by a nonprofit organization exempt from federal income tax under Title 26 U.S.C. Sec. 501(c) of the federal internal revenue code.
• Music lessons regardless of the number of participants.
• Incidental instruction related to the existing exclusion for musical, dramatic, comedic, or similar performances.

For a list of other activities already excluded from the definition of live presentations, please see our interim guidance statement.

How will I report these services?

Income from providing before and after school care is generally subject to business and occupation (B&O) tax under the Child Care classification.

Presentations given by nonprofit organizations are generally subject to B&O tax under the Service and Other Activities classification, unless it is an exempt fundraising activity.

Income from providing music lessons or instruction that is incidental to a musical, dramatic, comedic, or similar performance is subject to B&O tax under the Service and Other Activities classification.

Do I have to collect sales tax on excluded services provided prior to July 1, 2026?

You do not have to collect sales tax if the excluded services meet the requirements for existing contract treatment as provided in our interim guidance statement. The department is extending the grace period for newly excluded services through June 30, 2026. You must collect sales tax through June 30, 2026, if you do not meet the requirements for existing contract treatment.

Tribal consultation and guidance status

This notice provides information on select changes enacted during the 2026 legislative session. The department has not issued an Interim Guidance Statement, Excise Tax Advisory, or initiated rulemaking on this topic. The department is consulting with tribes on ESSB 5814 (2025). Vendors with tribal customers should request a ruling.