On October 1, 2025, certain service providers in Washington State were required to start charging retail sales tax. This is due to the passing of Engrossed Substitute Senate Bill (ESSB) 5814, which added new business activities to the definition of retail services.
The newly added service activities are:
- Advertising services
- Live presentations
- Information technology (IT) services
- Investigation, security, and armored car services
- Temporary staffing services
- Sales of custom software and customization of prewritten software
- Custom website development
The bill also redefined services as digital automated services (DAS), which is also subject to the new tax. These include services involving primarily human effort and data processing services. Telehealth and Telemedicine services, however, were exempted.
In addition to charging the sales tax, these businesses must confirm that they are charging the correct amount. The sales tax rate is comprised of the 6.5% State rate and the local rate for services delivered to the customer at the business or store location. For those services delivered to customers at another location within the state, such as their home or place of business, the local tax rate is determined by the customer’s location. To help with calculating this, the Washington State Department of Revenue (DOR) has an online Tax Rate Lookup Tool available https://webgis.dor.wa.gov/taxratelookup/SalesTax.aspx .
Service providers must list the tax separately on the receipt or invoice provided to the customer and are responsible for reporting and sending the correct tax amount to the DOR.
Additional information is available on the DOR & Washington State Legislature websites: