Washington’s Sales Tax Expansion: What Your Business Needs to Know Before October 1, 2025 

Starting October 1, 2025, many Washington businesses will face new sales tax obligations due to Engrossed Substitute Senate Bill (ESSB) 5814, which significantly expands the definition of 'retail sales.' This legislative change means that several service categories—previously exempt—will now be subject to retail sales tax and Retailing B&O tax. 

Newly Taxable Services 

Live Presentations: 

Businesses offering lectures, seminars, workshops, or courses—whether in person or via real-time online platforms—must begin collecting sales tax. This includes professional training, continuing education, and interactive webinars. The tax applies regardless of whether the audience is in a physical location or attending virtually. 

Security Services: 

Services such as investigation, security monitoring, bodyguard services, and armored car transport are now considered retail sales. Businesses providing these services must determine the location of the sale to apply the correct local tax rate. 

Temporary Staffing: 

Temporary staffing services—defined as providing workers to other businesses for short-term needs—are now taxable. This includes contract or fee-based placements, but excludes staffing for licensed hospitals under RCW chapters 70.41 and 71.12. 

Advertising Services: 

All digital and nondigital advertising services are now subject to sales tax. This includes graphic design, layout, campaign planning, search engine marketing, lead generation, acquisition of ad space, and performance analytics. Exceptions include services related to newspapers, radio/TV broadcasting, and certain out-of-home advertising formats like billboards and transit ads. 

Information Technology & Website Development: 

Businesses offering IT training, technical support, help desk services, network operations, and website development must now collect sales tax. This also includes custom software development, customization of prewritten software, data processing, and implementation services. 

What Businesses Should Do: 

To comply with these changes, businesses should: 
- Review the Department’s guidance for their specific service category. 
- Update accounting systems to collect and remit sales tax starting October 1. 
- Report income under the Retailing B&O, retail sales, and local sales tax classifications. 
- Determine the location of the sale to apply the correct local tax rate. 
- Request a letter ruling if uncertain about how the law applies to their services. 

Resources & Support: 

The Department of Revenue is publishing Interim Guidance Statements (IGSs) and hosting webinars to help businesses prepare. You can also contact the Department directly at Rulings@dor.wa.gov or call 360-705-6705 for assistance. You can also find more information here: Services newly subject to retail sales tax | Washington Department of Revenue