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Is your service newly taxable in Washington?

Effective October 1, 2025, ESSB 5814 pulled a wide range of services into the retail sale definition and struck four digital automated services exclusions. ESSB 6113 (2026) revised this law. ESSB 6346 (2026) is scheduled to remove most of these services, but not advertising services, from the retail sale definition on Jan. 1, 2029; that change depends on the bill's new income tax surviving court review (§1202). This preview explains the classification capability within Taxability Matrix; transaction facts and maintained decisions stay inside the signed-in workspace.

Services enumerated as retail sales

IT services and technical support, custom software and website development, temporary staffing, investigation and security services, armored car, and advertising services became retail sales — retail sales tax applies and the seller's B&O classification shifts to Retailing.

DAS exclusion changes (ESSB 5814, 6113, 6346)

ESSB 5814 removed four exclusions from the digital automated services (DAS) definition in RCW 82.04.192(3)(b): advertising, data processing, live presentations, and services that primarily involve human effort. Those services can now be DAS, and so retail sales, when they meet the DAS definition. Sales between members of an affiliated group are excepted. ESSB 6113 (2026) then added a new exclusion for DAS use that is incidental to an underlying service (see below). Whether a specific service is taxable depends on the facts.

Transitional relief

Contracts signed before October 1, 2025 (and not materially modified) kept their prior treatment through reporting periods ending March 31, 2026; contracts paid in full before the effective date are deemed sold before it.

2026 change: incidental-use exclusion (ESSB 6113 §4)

ESSB 6113 §4 (ch. 250, Laws of 2026) added a new exclusion to the DAS definition, now RCW 82.04.192(3)(b)(xiv). Under it, "digital automated service" does not include "The use of a digital automated service that is incidental to the underlying service."

DOR may set factors for when that use is incidental. The statute says those factors must include, at a minimum, that (I) the buyer uses the DAS "solely for the purpose of transmitting or exchanging communications between the service provider and the buyer," and (II) "there is no consideration from the buyer of the underlying service for the use of a digital automated service" for that purpose. An "underlying service" is one whose income would be taxed under a B&O classification other than retailing services (RCW 82.04.250) if the exclusion applied.

Under §27 of ESSB 6113, this exclusion applies retroactively to October 1, 2025.

Scheduled 2029 repeal (ESSB 6346)

ESSB 6346 (ch. 238, Laws of 2026) schedules repeal of most ESSB 5814 retail-services taxes on January 1, 2029. Section 1001 removes IT services, custom website development, investigation, security, and armored car services, temporary staffing, live presentations, and custom software and customization of prewritten software from the retail-sale definition. Section 1002 restores the DAS exclusions for live presentations, data processing, and primarily-human-effort services. Section 1003 makes both effective January 1, 2029. Advertising services are not part of the repeal and stay retail sales.

The repeal is conditional. Under §1202, if a court of final jurisdiction invalidates §201 (the new 9.9% income tax), sections 1 through 1003 and 1201 through 1209 of ESSB 6346, including the repeal sections, are null and void. Treat the 2029 repeal as scheduled, not certain. See the retail-services tracker for current status.

Sources

Last reviewed: October 7, 2026

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What ESSB 5814 Classifier does

Within Taxability Matrix, this capability evaluates a saved service description and transaction period against the expanded retail-service categories, the digital automated services changes, and the available transitional rules.

The working tool is available after you sign in.

This public page shows capabilities and deliverables only. It does not collect your facts, accept documents, or calculate a personalized result.

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Characterize the service

Compares the actual scope of work with ESSB 5814's enumerated services and digital-product definitions.

Apply the effective date

Separates pre-October 1, 2025 treatment from the rules that apply after the expansion took effect.

Test transitional relief

Reviews pre-existing contracts, paid-in-full transactions, and affiliated-group facts that can change the outcome.

Connect tax consequences

Shows the possible sales tax, Retailing B&O, Service & Other B&O, and sourcing consequences for review.

What the tool produces

A saved classification tied to the service description and transaction period reviewed.
The likely pre- and post-ESSB 5814 treatment with confidence and caveats.
The statutory and DOR authorities supporting the analysis.
A clear list of missing contract or relationship facts that require professional review.

How this classifier works

The classification is deterministic — the same category patterns and 2025-10-01 period gate our Tax Refund Engine applies to purchase data, verified against DOR's ESSB 5814 guidance. A contract's scope of work can change the answer, so each saved result carries a confidence score and the authorities to check.

Paying tax on services like these before October 1, 2025 — or unsure whether a vendor is charging you correctly now? The Tax Refund Engine analyzes your actual transactions row by row, and Delphi can research the statute against your facts.

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