As of October 1, 2025, Washington State will begin taxing several professional services that were previously exempt, following the enactment of Engrossed Substitute Senate Bill (ESSB) 5814. If you provide—or purchase—services such as web development, IT support, staffing, or training workshops, it’s critical to understand how this impacts your invoices, client billing, and compliance responsibilities.
At the Law Office of Theresa Nguyen, PLLC, we help businesses and individuals confidently adjust to these changes.
Under ESSB 5814, the following services will now require sales tax collection:
Information technology services (e.g., help desk, network support, in-person software training)
Custom website development
Investigation, security, and armored car services (excluding locksmiths)
Temporary staffing services (fees, wages, and employee costs included in gross income)
Advertising services (digital and traditional ad creation, placement, campaign evaluation)
Live presentations, including in-person or real-time virtual lectures, seminars, workshops
Sales of custom software and customization of prewritten software (license, subscription, use-based charges)
Modification of Digital Automated Services (DAS) exclusions, including removal of “human effort,” “advertising,” “data processing,” and “live presentations”—but telehealth/telemedicine remains exempt; affiliates performing excluded services remain untaxed per DOR guidance.
“Live presentations” ambiguity: Seminars by public schools or accredited colleges are excluded, but other training and paid webinars likely fall within the tax scope.
Professional services vs. DAS: Traditional professional services (e.g., legal, accounting, architecture) remain subject to B&O tax, not sales tax. However, if a service is offered via a portal or template (a DIY format), it may be classified as a DAS and become taxable.
Conduct a service inventory to identify taxable services.
Adjust billing systems to collect retail sales tax on affected services.
Train staff and inform clients about the added tax line on invoices.
Watch for DOR guidance updates, including interim guidance statements coming by September.
| Scenario | Tax Impact Starting Oct. 1 |
|---|---|
| Tech support retainer | Now subject to sales tax |
| Advertising campaign management – digital or traditional | Taxable |
| Live webinar training | Taxable unless by public university |
| Custom web app or software license | Taxable |
| Accounting advisory w/ custom portal | Likely still B&O, not sales tax |
Incorrectly classifying taxable services may result in audits, penalties, or failure to collect revenue.
Clients may question new line items—transparency is key to maintaining trust and avoid disputes.
Businesses in WA or serving WA must register for retail sales tax, not just B&O, if they exceed economic nexus thresholds.
Out-of-state providers may suddenly be required to collect WA sales tax with economic nexus now including these new services.
At the Law Office of Theresa Nguyen, PLLC, we assist Washington businesses and service providers with:
Evaluating which services become taxable under ESSB 5814
Updating service descriptions, contracts, and invoicing systems
Navigating DOR guidance and listening session updates
Defending against audits or earnings classification disputes
Contact us today to ensure your service offerings remain tax-compliant and profitable when the new rules take effect.
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