Washington State Sales Tax Updates

New guidance for the WA State digital services sales tax as of 9/4/2025

If you are under an existing contract signed prior to 10/1/2025, the old law applies (no sales tax).

If you are a CONSUMER of software products to produce your services you do not need to collect sales tax  (for example TAX PREPARERS (woo hoo), attorneys, appraisers, architects, engineers and lobbyists). We do not know yet if Graphic Design or Video Production falls under this category.

Things we know that ARE required to collect and remit sales tax are:

  • Advertising services

  • Live presentations

  • Information technology services

  • Custom website development services

  • Investigation, security, and armored car services

  • Temporary staffing services

  • Sales of custom software and customization of prewritten software

Live Presentations do NOT include telemedicine. We do not know yet if they include on-line exercise classes, but we think it likely does – stay tuned for more.

9/14/2025

We have a lot of new information about what is subject to the new Washington State sales tax rules. One thing that has not be clarified is Advertising. (Graphic Designers – this is you!) Stay tuned. There is a possibility that delivering your product on a flash drive will exempt it from taxation. In the meantime, get those contracts signed before 10/1/25.

What HAS been clarified last week:

1) Website development and maintenance is subject to the new sales tax rules.

2) Basically ALL IT Services are now subject to sales tax:

  • Support activities such as telephone consulting, help desk services, and remote training related to network hardware or software.

  • Services that provide network diagnostic, analysis, advisory support, quality assurance testing, localization services, network information logistics, and maintenance support services on new or existing network infrastructure.

  • Onboarding and offboarding services (e.g., setting up users with laptops and accounts).

  • Managed IT services, including infrastructure network configuration, analysis, and implementation.

  • Consulting or project management services, including planning efforts, analysis, engineering, testing, or deployment.

  • Project management and technical program manager services that manage engineers and consultants who are providing IT Services.

  • Migrating services and support, including the transfer, relocation of services from one environment to another, and associated project management services.

  • Consulting and support services in connection with digital products, including digital automated services.

  • Services that troubleshoot hardware and software issues and that provide information technology solutions.

  • Network security management and implementation of network security strategies.

3) Live presentations

What is required to make the presentation taxable:

  • The purpose of the activity is to inform, explain, persuade, or educate on a particular subject;

  • The structure of the activity is in the form of a seminar, lecture, workshop, course, or any similar event;

  • The activity allows for interaction with or participation from the audience in real time, although interaction or participation is not required; and

  • The activity must allow for more than one attendee.

What is NOT taxed:

  • Classes by Non-Profits or preschools

  • Private Tutoring with only one client

  • Athletic and Fitness (including Dance)

  • Performances

  • Pre-recorded presentations

  • Tele-medicine