Digital goods bought solely for business use

A business pays no Washington sales or use tax on digital goods it buys solely for business purposes. It is the narrowest of the digital exemptions in what it covers: digital goods only. Software, software as a service and digital automated services do not qualify, and government entities cannot use it.

Who qualifies

• A business buying digital goods, and services rendered in respect to digital goods, solely for business purposes.
• "Business purposes" means any purpose relevant to the buyer's business needs. It excludes personal, family and household purposes.
• Government entities cannot claim it: the statute excludes any activity conducted by a government entity as defined in RCW 7.25.005.

What qualifies

• Digital goods: sounds, images, data, facts or information transferred electronically. The WAC lists, for example, digital schematics, digital car history reports, digital pictures, digital periodicals and presentations, and digital audio, audio-visual works and books.
• Services rendered in respect to digital goods.
• A digital code, if every digital good obtained with it will be used solely for business purposes.
• The matching use tax exemption is RCW 82.12.0208(6).

Not covered

• Digital automated services, prewritten software and remote access software. WAC 458-20-15503(505) and form REV 27 0050 both say so.
• A digital code that gives access to both digital goods and digital automated services.
• Purchases for personal or household use, and goods not used solely for business.
• Purchases by a state or local government entity.
• The seller's retailing B&O tax, which still applies (DOR digital products page).

What the buyer gives

Form REV 27 0050, Digital Products and Remote Access Software Exemption Certificate (revision 11/10/25), with the box "Digital goods purchased solely for a business purpose" ticked. The buyer ticks a single purchase (with the invoice or purchase order number) or a blanket certificate, valid while buyer and seller have at least one sale within twelve consecutive months; enters the seller's or marketplace facilitator's business name; gives its own business name, address, Account ID, phone, email and type of business; and signs with a printed name and date. The certification says misuse brings taxes, interest and possible penalties. The form cannot be used for purchases for personal use. The WAC says the exemption is available only when the buyer gives the seller a certificate.

What the seller keeps

RCW 82.08.0208(7): obtain the certificate in the form the department prescribes and retain a copy; the seller may capture the streamlined sales and use tax data elements instead. Form REV 27 0050: keep a copy and do not send it to the Department. Before accepting the box, the seller can check that what it sells is a digital good rather than a digital automated service or software, since the exemption covers digital goods only. RCW 82.32.070(1) requires taxpayers to "keep and preserve, for a period of five years, suitable records as may be necessary to determine the amount of any tax for which the taxpayer may be liable." Under RCW 82.08.050(4) a seller is not relieved of the tax unless it keeps proper records of exempt sales and provides them when the department asks; (7)(a) relieves a seller that obtains a fully completed certificate within 90 days after the sale, and (7)(b) allows 120 days after a department request to prove the sale was not taxable or obtain a fully completed certificate taken in good faith.

Common mistakes

• Claiming it for a software subscription or online service. Those are remote access software or digital automated services, not digital goods.
• A city, county or school district using the business purpose box. Government entity activity is excluded.
• Buying music, films or e-books for personal use on the business account. The goods must be used solely for business.
• Buying a code or bundle that unlocks both content and an online service. The code then fails the test.

Common questions

Are stock photos bought for a company's marketing exempt from Washington sales tax?

They can be. Digital pictures transferred electronically are digital goods, and marketing is relevant to business needs. The business gives the seller form REV 27 0050 with the business purpose box ticked.

Does the business purpose exemption cover cloud accounting software?

No. Software used on the seller's server is remote access software, which the business purpose exemption does not cover. If the software is used by staff in and outside Washington, the multiple points of use exemption may apply instead.

Can a public agency claim the digital goods business purpose exemption?

No. The statute excludes any activity conducted by a government entity.

Sources

• RCW 82.08.0208 (3)(a)-(b), (7)
• RCW 82.12.0208 (6)
• WAC 458-20-15503 (202), (505)(a)-(e)
• DOR form REV 27 0050 (11/10/25), Digital Products and Remote Access Software Exemption Certificate Section 1 "Digital goods purchased solely for a business purpose"; page 2 section 6
• DOR: Digital products including digital goods Digital goods purchased for a business purpose
• RCW 82.08.050 (4), (7)(a)-(c) seller records and certificate timing
• RCW 82.32.070 (1) five-year record retention