Sources checked Oct. 14, 2026. Washington Tax Desk is independent of the Washington Department of Revenue (DOR) and is not a CPA or law firm.
Quick answer
Starting Oct. 1, 2025, ESSB 5814 (ch. 422, Laws of 2025) made several services retail sales in Washington: advertising services, information technology services, custom website development, live presentations, investigation and security services (including armored car), temporary staffing, and custom software and customization of prewritten software. DOR says that if you sell one of these services, "you must start collecting sales tax on your invoices," unless an exclusion, exemption or resale applies. Later laws (ESSB 6113 and ESSB 6346) changed some details, as noted below.
Services that became retail sales on Oct. 1, 2025
| Service | Statute (as amended) | DOR: what's included | DOR: what's NOT included | Deeper WTD page |
|---|---|---|---|---|
| Advertising services | RCW 82.04.050(3)(k) | "Ad design, ad placement, campaign planning, lead generation, and acquisition of advertising space on the internet, and more." | "Web hosting, domain registration, certain newspaper/in-print advertising, radio and television ads, fixed signage, out-of-home ads, and more." | Contracts, advertising MPU & penalty relief |
| Information technology (IT) services | RCW 82.04.050(3)(g) | "Help desk services, network support, training, IT consulting, data processing, and data entry." | "Web hosting, domain registration, and payment processing services." | Retail services hot topic |
| Custom website development | RCW 82.04.050(3)(h) | "Website design, development, and support." | "Web hosting and domain registration services." | Retail services hot topic |
| Live presentations | RCW 82.04.050(3)(l) | "In-person or via the internet workshops, webinars and courses with real-time interaction." | "Classes by preschools, elementary, secondary, and higher education as part of their accreditation, performances, sports events, tutoring and more." | DJ services tax topic |
| Investigation, security and armored car services | RCW 82.04.050(3)(i) | "Security guard, background checks, armored car, investigation, and security systems services." | "Locksmith services." | Retail services hot topic |
| Temporary staffing | RCW 82.04.050(3)(j) | "Supplying workers to businesses under contract or on short-term assignment." | "Hospital staffing, direct hires, independent contractors, paymaster, and third-party outsourcing services." | Temporary staffing and ESSB 5814 |
| Custom software and customization of prewritten software | RCW 82.04.050(6) | "Access to and use of custom software, and customization of prewritten software." | "Unmodified off-the-shelf software." | Master copies of software |
"Included" and "NOT included" columns quote DOR's summary table on its services hub. They are summaries. The statute and DOR's interim guidance for each service control the details.
Digital automated services (DAS): DOR says some services that had been excluded from DAS ("advertising, live presentations, data processing, and services provided through primarily human effort") are no longer excluded, and that the law "now specifically excludes telehealth/telemedicine services from retail sales tax."
Resale: DOR says these services can be resold "in some cases." The buyer gives the seller a reseller permit, and the seller then doesn't collect sales tax.
Later changes
ESSB 6113 (ch. 250, Laws of 2026). Its session law lists an effective date of June 11, 2026. Section 27 says sections 2, 3, 4, 8, 10, 12 through 18, and 22 "apply both prospectively and retroactively to October 1, 2025." Those sections include the advertising multiple-points-of-use (MPU) exemption (§§10 and 15) and the incidental-use DAS exclusion (§4). The governor vetoed §23, which would have created a separate ESSB 5814 penalty waiver program. DOR's ESSB 5814 FAQ and its September 2025 advertising interim guidance predate ESSB 6113.
ESSB 6346 (ch. 238, Laws of 2026), effective July 1, 2026 (§1106):
- Schools and libraries (§§1102–1103). Sales tax "does not apply to sales of" IT services, custom website development, live presentations, investigation/security/armored car, temporary staffing, and custom software and customization to "public libraries, library districts, library service centers, K-12 schools, school districts, and educational service districts." Buyers use DOR's exemption certificate. Sellers still report retailing B&O and take a "Sales of Exempt Services to Libraries and Schools" deduction. Advertising is not on the list. The use tax section (§1103) does not list live presentations. DOR's notice does not address private schools, so whether a particular school qualifies depends on the facts.
- Live presentations (§1101). New exclusions cover before- and after-school care provided by elementary schools, presentations by nonprofits exempt under 26 U.S.C. Sec. 501(c), music lessons, and instruction incidental to performances.
- Hospital staffing (§1101). The temporary staffing exclusion now also covers staffing "utilized by hospital-based clinical providers to supplement their fulfillment of hospital contracts for professional services" for limited periods.
- §1107 says that if any of §§1–911 of the act are held invalid, §§1101–1106 are not affected. They are not covered by the §1202 null-and-void clause.
Scheduled 2029 repeal. ESSB 6346 (ch. 238, Laws of 2026, §§1001 and 1003) 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).
Guidance status. DOR's guidance on these services is largely in interim guidance statements, which DOR says apply until it issues final guidance.
Missed collecting? Penalty relief
DOR's ESSB 5814 Penalty Relief Program covers uncollected retail sales tax and unpaid use tax caused by ESSB 5814, for reporting periods from Oct. 1, 2025, through Dec. 31, 2026. Applications must be submitted by Sept. 30, 2027. DOR: "This program only waives penalties. The tax itself and any interest still need to be paid." Evasion, negligence and tax avoidance penalties are not eligible. For preexisting contracts with temporary relief, penalty relief starts when the contract no longer qualifies for that relief or on April 1, 2026, whichever comes first.
What this page doesn't settle
- Whether a specific service fits a category depends on the facts and DOR's interim guidance for that service.
- DOR's schools-and-libraries notice says DOR "has not issued an Interim Guidance Statement, Excise Tax Advisory, or initiated rulemaking on this topic," and that "The department is consulting with tribes on ESSB 5814 (2025)." It says vendors with tribal customers should request a ruling.
- DOR's hub says DOR is in ongoing legal proceedings about ESSB 5814 and that "affected taxpayers must report, collect, and remit taxes in accordance with current guidance."
FAQ
What services became taxable in Washington on Oct. 1, 2025? Under ESSB 5814: advertising, IT services, custom website development, live presentations, investigation/security/armored car services, temporary staffing, and custom software and customization of prewritten software (DOR services hub; RCW 82.04.050).
Is web hosting subject to the new sales tax on services? DOR lists web hosting and domain registration as not included under advertising, IT services and custom website development.
Are schools exempt from the ESSB 5814 sales tax? Starting July 1, 2026, public libraries, library districts, library service centers, K-12 schools, school districts and educational service districts are exempt from sales tax on every listed service except advertising (the use tax exemption in §1103 also omits live presentations). They need DOR's exemption certificate (ESSB 6346 §§1102–1103). DOR's notice does not address private schools.
Is the ESSB 5814 sales tax on services being repealed? ESSB 6346 schedules a conditional repeal of most of these services, not advertising, on Jan. 1, 2029. Under §1202, it depends on the bill's income tax surviving court review.
Are nonprofit workshops subject to sales tax? Since July 1, 2026, live presentations given by a nonprofit exempt under 26 U.S.C. Sec. 501(c) are excluded from retail sales (ESSB 6346 §1101; DOR special notice, Apr. 3, 2026).
Sources
- DOR, Services newly subject to retail sales tax
- RCW 82.04.050
- ESSB 5814 session law (ch. 422, Laws of 2025)
- ESSB 6113 session law (ch. 250, Laws of 2026)
- ESSB 6346 session law (ch. 238, Laws of 2026), §§1001, 1003, 1101–1107, 1202
- DOR special notice, New sales/use tax exemption for purchases of certain retail services by schools and libraries (Apr. 3, 2026)
- DOR special notice, Live presentations: New exclusions from retail sales (Apr. 3, 2026)
- DOR, ESSB 5814 Penalty Relief Program
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General information, not individualized tax advice. Results depend on the facts and applicable law. Washington Tax Desk is independent of Washington DOR.