Washington to Tax More Services Starting October 2025: What ESSB 5814 Means for Your Business

​Washington to Tax More Services Starting October 2025: What ESSB 5814 Means for Your Business

Big changes are coming to the way Washington State collects sales tax. Beginning October 1, 2025, many services that were never taxed before will now have a sales tax added to their prices. This change is part of a new law called ESSB 5814, which state lawmakers passed in 2025.

Here is what is happening, who it affects, and how people and businesses can prepare.

What’s the Change?

Until now, the sales tax in Washington was mostly applied to physical things such as clothing, electronics, or restaurant meals. However, under ESSB 5814, several services will now be taxed, just like the goods you buy in a store.
These include:

• Online and digital advertising services
• IT support and tech consulting
• Custom software and website development
• Temporary staffing (except hospital staffing)
• Security and investigation services
• Webinars and live training presentations

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If you provide any of these services, you will have to start charging your customers’ sales tax and sending that money to the state. If you are a customer, you may notice higher prices on your bills for these services, starting in October.

Why Is This Happening?

The main goal is to raise more money for state programs such as schools, roads, and public safety. The state expects this new law to bring in over a billion dollars over the next two years.

State officials also say the change makes the tax system fairer. Since people spend more on services today than they did in the past, the law helps to ensure that services and products are taxed more evenly.

Who Will Be Affected?

If you own or work for a business that provides services, such as digital ads, tech help, or training events, this law likely affects you. You’ll need to:

• Figure out which services you offer are now taxable
• Update billing and software systems to charge sales tax
• Train your team to understand the changes

Customers—including other businesses—will also be affected. Whether you are hiring a consultant or attending a paid webinar, expect to see sales tax added to your invoice.

How to Prepare

The Department of Revenue (DOR) is helping businesses prepare. They hold online sessions this summer where people can ask questions and learn more. They also share guides and updates on their websites to explain the new rules.

If you run a business, now is the time to:

• Review your services
• Talk to your accountant or tax advisor
• Stay up to date with announcements from the DOR

Some groups are concerned the new rules may be confusing, especially for services that involve digital work. There is also discussion about possible legal challenges, especially when it comes to taxing online ads, while traditional advertisements such as newspapers and billboards are left out. However, at present, this law is moving forward.

ESSB 5814 is a significant change for Washington. By October 1, 2025, many services will be treated as retail goods when it comes to sales tax. The law affects both service providers and customers, and it is important to start preparing.
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Whether you are running a business, working in tech or marketing, or just curious about how taxes work, this is a real-world example of how laws shape our economy. For the latest information and tools to help you prepare, visit the Washington Department of Revenue’s website.