Services newly subject to retail sales tax

Engrossed Substitute Senate Bill (ESSB) 5814 added new business activities to the definition of retail sales. This means sellers must begin collecting sales tax on these services on October 1, 2025:

• 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.

This page provides basic information on the services that are now subject to sales tax. The department will publish additional guidance in the form of Special Notices, Frequently Asked Questions, Interim Guidance Statements (IGS), Excise Tax Advisories, and Rulemaking.

We will update this page with links to the additional guidance as it’s published. 

Steps we’re taking

The department is devoting significant resources to developing and publishing guidance prior to the effective date of October 1, 2025.

Current plans include:

• Multiple listening sessions to be held during the month of July.
• Multiple interim guidance statements (IGSs).
  • We are using IGS because they are faster than administrative procedures act (APA) guidance. Our plan is to incorporate your feedback into the IGSs, which will later be converted to APA guidance.
• Multiple special notices.
• Multiple updates to existing web content.
• Direct messages to impacted businesses with links to the published guidance.

Our goal is to publish the interim guidance in early September. However, this goal could be extended if there are unanticipated complications.

Your voice matters

July listening sessions

Space available in the Investigation, security, and armored car services session on July 31 at 10 – 11 AM. View the schedule and register.

Can't attend?

Submit your feedback online.

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Other ways to provide feedback

The department welcomes your questions and feedback, including areas where you believe guidance may be needed. Your questions and feedback will help us update guidance on a timelier basis.

You can submit questions and comments to Rulings@dor.wa.gov. We will answer your questions as quickly as possible. However, since this is new legislation, it may take us longer than our standard 10-days. You do not have to tell us who you are if you are merely providing comments or feedback and would like general information.

Information technology services

 

Information technology training services, technical support, and other services include, but are not limited to:

• Assisting with network operations and support.
• Help desk services.
• In-person training related to hardware or software.
• Network system support services.
• Data entry services.
• Data processing services.

Issues we have identified

How broadly does data processing language apply?

Does the data processing language affect other exclusions from DAS such as travel agent services, payment processing, etc.?

More information

Coming soon.

Custom website development services

 

Website development service means the design, development, and support of a website provided by a website developer to a customer.

Issues we have identified

How should the location of the sale of custom website development services be determined?

More information

Coming soon.

Investigation, security, and armored car services

 

Investigation, security, security monitoring, and armored car services include, but are not limited to:

• Background checks.
• Security guard and patrol services.
• Personal and event security.
• Armored car transportation of cash and valuables.
• Security system services and monitoring.

Note: This does not include locksmith services.

Issues we have identified

How should the location of the sale of bodyguard and other investigative services be determined?

More information

Coming soon.

Temporary staffing services

 

Temporary staffing service means providing workers to other businesses for limited periods of time to supplement their workforce and fill employment vacancies on a contract or a fee basis.

Note: This does not include providing workers to hospitals licensed under chapter 70.41 or 71.12 RCW.

Issues we have identified

What is included in temporary staffing services?

• For example: Do temporary staffing services include 1099 contractors or temporary direct hires?

Can a staffing business deduct amounts paid to the employee?

How should the location of the sale of temporary staffing services be determined?

More information

Coming soon.

Advertising services

 

Advertising services means all digital and nondigital services related to the creation, preparation, production, or dissemination of advertisements including, but not limited to:

• Layout, art direction, graphic design, mechanical preparation, production supervision, placement, referrals, acquisition of advertising space, and rendering advice concerning the best methods of advertising products or services.
• Online referrals, search engine marketing, and lead generation optimization, web campaign planning, the acquisition of advertising space in the internet media, and the monitoring and evaluation of website traffic for purposes of determining the effectiveness of an advertising campaign.

Advertising services do not include:

• Web hosting services and domain name registration.
• Services rendered in respect to the following:
  • Newspapers as defined in RCW 82.04.214.
  • Printing or publishing under RCW 82.04.280.
  • Radio and television broadcasting" within this state as defined in RCW 82.04 (section 1, chapter 9, Laws of 2025).
• Services rendered in respect to out-of-home advertising, including:
  • Billboard advertising.
  • Street furniture advertising.
  • Transit advertising.
  • Place-based advertising, such as in-store display advertising or point-of-sale advertising.
  • Dynamic or static signage at live events.
  • Naming rights.
  • Fixed signage advertising.
  • Note: Does not include direct mail.

Issues we have identified

How should the location of the sale of advertising services be determined?

Is the multiple points of use (MPU) exemption available for electronically transferred advertising services?

Should the department consider allowing businesses to use a direct pay permit to pay sales tax on advertising services?

More information

Coming soon.

Live presentations

 

Live presentations include, but are not limited to, lectures, seminars, workshops, or courses where participants attend either in person or via the Internet or telecommunications equipment that allows audience members and the presenter or instructor to give, receive, and discuss information with each other in real time.

Issues we have identified

What is included in live presentations? For example:

• Does it apply to preschools, live entertainment, conventions, training, continuing legal or professional education, or political events?
• Does it apply to local government or nonprofit entities?

Can live presentations be purchased for resale?

• If yes, under what conditions? How should the department define the term “audience”?

More information

Interim Statement regarding live presentations for schools and institutions of higher education

Sales of custom software and customization of prewritten software

 

Retail sale now includes sales of custom software and customization of prewritten computer software to a consumer, regardless of the method of delivery to the end user. This includes:

• Charges to consumers for the right to access and use custom software, and customization of prewritten computer software, where possession of the software is maintained by the seller or a third party, regardless of whether the charge for the service is on a per use, per user, per license, subscription, or some other basis.
• The right to access and use custom software, and customization of prewritten computer software to perform data processing.

Issues we have identified

How should the location of the sale of custom software or customization of prewritten software be determined?

More information

Coming soon.

Modifications to digital automated service (DAS) exclusions

 

The following changes were made to DAS exclusions:

• Removed:
  • Services primarily involving human effort.
  • Live presentations.
  • Advertising services.
  • Data processing.
• Added:
  • Telehealth and telemedicine.
• Clarified that sales of the following DAS to affiliates are not considered retail sales:
  • Services involving primarily human effort.
  • Live presentations.
  • Advertising services.
  • Data processing.

Issues we have identified

Do traditional professional services such as legal, accounting, and lobbying become subject to retail sales tax as DAS if electronic tools are used in performing the services?

More information

RCW 82.04.299(1)(f) Workforce education investment surcharge (definition of affiliate)