New sales tax targeting business services looms over WA
Sep 2, 2025, 8:48 AM
Bob Ferguson speaks at a press conference outside the Washington Capitol. (Photo courtesy of KIRO 7)
(Photo courtesy of KIRO 7)
Starting Oct. 1, some Washington businesses will have to charge new sales taxes.
Engrossed Substitute Senate Bill (ESSB) 5814, which adds new business activities to the definition of retail sales, was passed by the Washington State Legislature earlier this year. According to The Center Square, the retail sales tax list now includes services such as advertising, live presentations, and custom website development.
Services including information technology, custom website development, investigation, security, armored car services, temporary staffing, advertising, and custom software sales are subject to the new tax.
Republicans argued the law is vague and could raise costs for families.
“Not only is it going to be a significant new tax on a whole host of things, but it’s so poorly defined … food, gas, housing, childcare, healthcare, it’s all getting taxed,” Sen. John Braun, R-Centralia, told The Center Square. “It’s all going to accrue to a higher cost of living for Washingtonians across the state. And that’s bad, that’s really bad.”
On the other side of the aisle, Democrats argued the hikes are needed to keep up with inflation and fund services.
“Whether it’s difficult reductions or difficult revenue, not a single cut or a single tax increase is something that is easy or that doesn’t impact somebody or that we take lightly,” Rep. Joe Fitzgibbon, D-West Seattle, told The Center Square. “I really think we did the best we could, given the hand that we were dealt.”
The Department of Revenue plans to release guidance this month. More information can be found here.
