New Washington Taxes Start Oct. 1: What You Need to Know

Starting October 1, Washington consumers will see higher costs as new retail sales taxes take effect under Engrossed Substitute Senate Bill 5814, passed by the 2025 Legislature.

The law expands the definition of retail sales to include a range of services, such as advertising, live presentations, information technology, custom website development, along with other professional services. These added taxes are expected to be passed along to consumers.

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The Washington Department of Revenue says it is preparing detailed guidance to help businesses comply, with interim industry-specific statements—covering areas like advertising, custom software, and temporary staffing—expected in early September.
Along with the expanded sales tax, the state’s business-and-occupation tax rate will also rise in October, projected to generate an additional $5.6 billion over the next four years.

Supporters argue the tax changes are needed to maintain funding for state programs amid rising costs, while critics warn the broad language—particularly around “presentations”—could unintentionally affect industries from entertainment and education to workplace training.
Businesses are urged to prepare now to avoid compliance issues and potential penalties once enforcement begins.