Washington Expands Retail Sales Tax to New Services Starting October 1, 2025

The 2025 Washington State Legislature has enacted Engrossed Substitute Senate Bill (ESSB) 5814, expanding the definition of “retail sales” to include several additional service categories. As a result, certain services that were previously not subject to sales tax in Washington will now be taxable beginning October 1, 2025. The change is part of a broader effort to modernize the state’s tax base and align it with the growing share of service-based economic activity. Businesses that provide or purchase these services should review the new requirements to ensure compliance. Newly Taxable Services Under ESSB 5814, the following services will be subject to Washington retail sales tax: 

1. Advertising Services
   All digital and non-digital services related to the creation, preparation, production, or dissemination of advertisements.
2. Live Presentations
   Lectures, seminars, workshops, and courses attended in person or via the Internet or telecommunications equipment, where participants and instructors can interact in real time.
3. Information Technology Services
   Includes IT training, technical support, and related services.
4. Custom Website Development Services
   Design, development, and support of websites provided by a website developer to a customer.
5. Investigation, Security, and Armored Car Services
   Encompasses investigation, security monitoring, and armored car services.
6. Temporary Staffing Services
   Providing workers to other businesses for limited periods to supplement staffing needs or fill vacancies on a contract or fee basis.
7. Custom Software and Software Customization
   Sales of custom software and customization of prewritten software to a consumer, regardless of whether delivered physically or electronically.

 If you sell any of these newly taxable services in Washington, proactive planning will help ensure a smooth transition. Businesses will need to register for sales tax in Washington by October 1, 2025, and update their systems to properly collect tax. The first sales tax return, covering October 2025 sales, will be due in November 2025. Sales Tax Rx can assist with Washington registration, preparation, and filing of Washington sales tax returns going forward, ensuring accurate filings at a fair, transparent price. Contact us to get started.