Retail services

Washington Retail Services Sales Tax

Track ESSB 5814, ESSB 6113, sourcing, MPU, DOR interim guidance, and the scheduled Jan. 1, 2029 repeal for most newly taxable services (not advertising), which depends on ESSB 6346's income tax surviving court review.

Active / changingUpdated: Oct 17, 2026Source checked: 2026-10-07

Watch: DOR guidance, ESSB 6113, ESSB 6346, litigation

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Status as of Oct 7, 2026

  • In effect now: ESSB 5814's retail sales tax on the listed services has applied since October 1, 2025, as amended by ESSB 6113 (ch. 250, Laws of 2026). ESSB 6113 took effect June 11, 2026, and several of its sections, including the advertising MPU exemption and the incidental-use DAS exclusion, apply retroactively to October 1, 2025. DOR's guidance on these services is largely in interim guidance statements, which DOR says apply until it issues final guidance.
  • Already changed on July 1, 2026: ESSB 6346 §§1101–1104 added exclusions, including presentations by 501(c) nonprofits, and those changes are in effect. They are not covered by the bill's court-invalidation clause.
  • Scheduled for January 1, 2029: ESSB 6346 §§1001–1003 repeal the retail sales treatment of most ESSB 5814 services. Advertising services are not repealed. Under §1202, the repeal is void if a court of final jurisdiction invalidates the 6346 income tax (§201).
  • Referendum ruling: The Washington Supreme Court held ESSB 6346 is not subject to referendum (No. 105220-1, May 4, 2026). It did not decide whether the income tax is constitutional.
  • On the ballot: Initiative 645, on the November 3, 2026 ballot, would repeal the 6346 income tax. Check this tracker after the election for any effect on the 2029 repeal.
  • ESSB 5814 litigation: DOR says it is in "ongoing legal proceedings" in which plaintiffs contend parts of ESSB 5814 violate the Washington Constitution or federal law on electronic commerce, and that taxpayers "must report, collect, and remit taxes in accordance with current guidance."

Sources: ESSB 6113 session law · ESSB 6346 session law · ESSB 6346 final bill report · WA Supreme Court order, No. 105220-1 · SOS Voters' Pamphlet, Nov 3, 2026 (I-645 text, p. 64) · AG explanatory statement, IP26-645 · DOR: Services newly subject to retail sales tax

Overview

ESSB 5814 expanded Washington retail sales tax to a set of services, effective October 1, 2025. DOR's interim guidance may be relied on until final guidance, cancellation, or new legislation changes the answer. ESSB 6346 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).

Do this first: Map each service you sell or buy to a DOR category, exclusion, or non-retail position, and keep sourcing documentation — contracts, statements of work, invoice allocation, purchaser address data, and usage data where relevant.

Sources: ESSB 5814 bill page · ESSB 5814 session law · ESSB 6113 bill page · ESSB 6346 bill page · DOR ESSB 5814 services hub · DOR interim guidance & rulemaking

Existing contracts: DOR interim guidance on contracts existing before October 1, 2025

Advertising services

Generally taxable. DOR's advertising guidance treats digital and nondigital services related to creating, preparing, producing, or disseminating ads as the main category — including online referrals, search engine marketing, lead generation optimization, web campaign planning, internet media acquisition, and website traffic analysis.

Key sourcing / exclusion: For sourcing, DOR points to the retail-sales-tax hierarchy in RCW 82.32.730 — seller business location if received there, known receipt location, purchaser address in business records, purchaser address obtained at sale, then a seller-provided location. For disseminated advertising, DOR focuses on where the result is first used — where ads are disseminated, viewed, or interacted with. Pre-dissemination creative services can require a different receipt analysis.

MPU for advertising: Since ESSB 6113 (ch. 250, Laws of 2026, §10, now RCW 82.08.0208(6)), a business buyer can claim the multiple points of use exemption on advertising services that will be concurrently available for use inside and outside Washington by giving the seller an MPU exemption certificate. The advertising no longer has to qualify as a digital automated service. The exemption is not available for personal use. The buyer then reports and pays use tax directly to DOR, apportioned under RCW 82.12.0208(7) based on where the ads are viewed or interacted with. The change took effect June 11, 2026 and applies retroactively to October 1, 2025. DOR's FAQ and its September 2025 advertising interim guidance predate 6113 and still describe the older DAS-only route.

Current guidance links

Information technology services

ESSB 5814 makes certain information technology services subject to retail sales tax. See DOR's interim guidance linked below for scope and exclusions.

Current guidance links

Custom website development

ESSB 5814 brings custom website development into the retail-sales-tax base. The line between custom development and prewritten/customized software matters here. See DOR's interim guidance linked below for scope and exclusions.

Current guidance links

Live presentations

Live presentations (in-person and virtual) are newly subject to retail sales tax, with education- and school-related considerations. A special notice and 2026 changes apply. See DOR's interim guidance linked below for scope and exclusions.

Current guidance links

Investigation, security, and armored car services

Investigation, security, and armored car services are newly subject to retail sales tax. See DOR's interim guidance linked below for scope and exclusions.

Current guidance links

Temporary staffing

Temporary staffing services are newly subject to retail sales tax and carry a dedicated DOR special notice, with modifications in 2026. See DOR's interim guidance linked below for scope and exclusions.

Current guidance links

Custom software and customization of prewritten software

Custom software and the customization of prewritten software are addressed by ESSB 5814. See DOR's interim guidance linked below for scope and exclusions.

Current guidance links

Digital automated services (DAS) changes

MPU for advertising: Since ESSB 6113 (ch. 250, Laws of 2026, §10, now RCW 82.08.0208(6)), a business buyer can claim the multiple points of use exemption on advertising services that will be concurrently available for use inside and outside Washington by giving the seller an MPU exemption certificate. The advertising no longer has to qualify as a digital automated service. The exemption is not available for personal use. The buyer then reports and pays use tax directly to DOR, apportioned under RCW 82.12.0208(7) based on where the ads are viewed or interacted with. The change took effect June 11, 2026 and applies retroactively to October 1, 2025. DOR's FAQ and its September 2025 advertising interim guidance predate 6113 and still describe the older DAS-only route.

Not settled by primary sources: whether a bundled transaction affects the new RCW 82.08.0208(6) exemption. DOR's bundling caveat in the advertising guidance was written for the DAS route.

Current guidance links

Sourcing and place of receipt

For services that are retail sales, DOR sources both retail sales tax and retailing B&O under RCW 82.32.730. B&O receipts attribution under RCW 82.04.462 / WAC 458-20-19402 applies only to income that stays in an apportionable classification, such as Service and Other (for example, excluded out-of-home advertising). Get the classification right first.

DOR's advertising interim guidance: “Retail sales must be sourced in accordance with RCW 82.32.730 for sales and use tax and retailing B&O tax purposes.” The IT guidance uses the same sentence.

For advertising, ESSB 6113 §2 adds: “In the event a person is unable to source advertising services in accordance with RCW 82.32.730 to the local level due to a lack of information, the person must source the services statewide in a manner prescribed by the department”.

Sources: DOR advertising-services interim guidance · DOR information-technology interim guidance · RCW 82.04.460 · ESSB 6113 session law (ch. 250, Laws of 2026)

What to do first

Sellers

  • Map each service line to a DOR category, exclusion, or non-retail service position.
  • Update invoice, POS, and customer-notice workflows for taxable sales made on or after October 1, 2025.
  • Keep sourcing support: contracts, statements of work, invoice allocation, purchaser address data, and usage data where relevant.

Buyers

  • Expect vendors to add sales tax on listed services when no exclusion or exemption applies.
  • Ask how multistate services, especially advertising, are being sourced before approving the charge.
  • Preserve exemption, reseller permit, direct-pay, or MPU documentation before relying on it.

CPAs / advisors

  • Get the classification right first. For services that are retail sales, DOR sources both retail sales tax and retailing B&O under RCW 82.32.730. B&O receipts attribution under RCW 82.04.462 / WAC 458-20-19402 applies only to income that stays in an apportionable classification, such as Service and Other (for example, excluded out-of-home advertising).
  • Screen existing contracts, bundled services, affiliate transactions, and resale/subcontractor arrangements.
  • Treat interim guidance, rulemaking, and litigation as required status checks before final advice.

2026 updates and special notices

ESSB 6113 is the verified 2026 retail-services source handle. It clarifies definitions and exclusions (temporary staffing, live presentations, advertising sourcing) and addresses use tax for newly enacted retail services. ESSB 6346's bill reports connect the millionaires-tax package to tax relief. ESSB 6346 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).

Special notices to watch: live presentations; schools and libraries exemptions; temporary staffing modifications.

Sources: ESSB 6113 bill page · ESSB 6113 final bill report · ESSB 6346 bill page · ESSB 6346 final bill report · DOR schools and libraries exemption special notice · DOR temporary-staffing hospital-modification special notice

Watchlist

  • DOR final guidance — interim guidance may be relied on until final guidance, cancellation, or new legislation. See DOR interim guidance and upcoming rulemaking.
  • Rulemaking — DOR identified several WACs and interpretive statements affected by ESSB 5814. See DOR public feedback listening-session report.
  • Penalty relief — DOR has a penalty relief program for some ESSB 5814 retail-service reporting periods.
  • ESSB 6113 — 2026 technical and administrative changes, including use-tax and sourcing clarifications.
  • ESSB 6346 — 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).
  • Litigation — DOR flags ongoing proceedings involving constitutional and electronic-commerce arguments, including Internet Tax Freedom Act arguments. Verify current status before relying on this page.

FAQ

Is every listed service automatically taxable? No. Read this as a category screen, not a final answer. A transaction still needs to fit the statutory category, avoid exclusions, and be checked against DOR interim guidance.

Is retail-sales-tax sourcing the same as B&O attribution? For services that are retail sales, DOR sources both retail sales tax and retailing B&O under RCW 82.32.730. B&O receipts attribution under RCW 82.04.462 / WAC 458-20-19402 applies only to income that stays in an apportionable classification, such as Service and Other (for example, excluded out-of-home advertising). Get the classification right first.

Can advertising services use the MPU exemption? MPU for advertising: Since ESSB 6113 (ch. 250, Laws of 2026, §10, now RCW 82.08.0208(6)), a business buyer can claim the multiple points of use exemption on advertising services that will be concurrently available for use inside and outside Washington by giving the seller an MPU exemption certificate. The advertising no longer has to qualify as a digital automated service. The exemption is not available for personal use. The buyer then reports and pays use tax directly to DOR, apportioned under RCW 82.12.0208(7) based on where the ads are viewed or interacted with. The change took effect June 11, 2026 and applies retroactively to October 1, 2025. DOR's FAQ and its September 2025 advertising interim guidance predate 6113 and still describe the older DAS-only route. Not settled by primary sources: whether a bundled transaction affects the new RCW 82.08.0208(6) exemption. DOR's bundling caveat in the advertising guidance was written for the DAS route.

Does the 2029 repeal remove all of these taxes? No. ESSB 6346 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).

What records matter most? Contracts, statements of work, invoices, purchaser location records, allocation support, viewer/targeting data for advertising, exemption certificates, reseller permits, and direct-pay or MPU support.

Sources

Legislation

DOR general administration

DOR service-specific guidance

Not legal advice. Specific decisions still need professional review.

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