New Sales Tax Obligations: Key Professions Impacted by Washington SB 5814
Effective October 1, 2025, Washington has implemented a major shift in its tax landscape through Senate Bill 5814. This legislation “modernizes” the tax code by reclassifying several traditionally exempt service sectors as “retail sales.” If you operate in any of the following fields, you are now required to register for a retail tax endorsement, collect sales tax from your clients, and report income under the Retailing B&O tax classification.
Information Technology (IT) Services
This broad category covers nearly all support and assistance for IT infrastructure. If your work involves keeping networks running or teaching others how to use technology, you likely fall under this mandate.
What’s Included: Help desk support, network assessments, system upgrades, and technical training.
Official Guidance: DOR Interim Guidance for IT Services
Advertising Services (Digital & Non-Digital)
In one of the bill’s most significant changes, advertising is no longer exempt. This applies to the entire lifecycle of an ad—from the initial “big idea” to its placement on a website.
What’s Included: Graphic design for ads, search engine marketing (SEM), lead generation, and media buying/placement.
Official Guidance: DOR Interim Guidance for Advertising Services
Custom Website Development
While web hosting remains exempt, the actual “craft” of building a site is now taxable. This includes both the initial design and ongoing technical support for the site.
What’s Included: Website layout design, coding/development, and maintenance.
Official Guidance: DOR Guidance for Custom Website Development
Investigation and Security Services
Professional “protection” services are now classified as retail activities. This affects both physical security and background-level investigations.
What’s Included: Security guards, armored car services, private investigations, and background checks.
Official Guidance: DOR Interim Guidance for Security and Investigation Services
Temporary Staffing Services
Agencies that provide workers to other businesses on a short-term or contract basis must now collect sales tax on the total gross income (including the staff’s wages and the agency’s fee).
What’s Included: General temporary staffing and contract labor. (Note: Hospital staffing is specifically excluded.)
Official Guidance: DOR Interim Guidance for Temporary Staffing
Live Presentations and Training
If you host webinars, workshops, or seminars that involve real-time interaction, your registration fees are now subject to sales tax.
What’s Included: Business seminars, professional development courses, and interactive online workshops.
Official Guidance: DOR Interim Guidance for Live Presentations
A Note on Professional Services (Lawyers & CPAs)
It is important to note that the Department of Revenue has clarified that traditional professional services—such as those provided by lawyers, accountants, and architects—generally remain subject to the “Service and Other Activities” B&O tax and do NOT need to collect sales tax, provided the service primarily involves “human effort” and isn’t purely a digital automated product.
Official Guidance on Professional Services: DOR FAQ on ESSB 5814
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