Washington sales tax on services, explained for the bookkeeper
Washington now treats advertising, custom software, website development, IT support, security, temporary staffing and live presentations as retail sales. This explainer walks a bookkeeper through the ad-design rule, the other covered services, where the sale is sourced, the pending legal challenges and 2027 and 2029 dates, the late penalties, and how a small practice handles it in Sundry.
- 0:00 Do I charge sales tax on ads?
- 0:16 Is ad design a retail sale?
- 0:30 Ads aren't the only service
- 0:41 Where the tax lands
- 0:52 Lawsuits and dates
- 1:17 Late penalties
- 1:25 Services in Sundry
- 1:41 A practice you can grow
Transcript
Taryn I design ads and run search campaigns for Washington clients. I've never charged sales tax. Do I now?
Dana Yes. Advertising has been a retail sale since October first, twenty twenty-five.
Sal Advertising services means creating, producing or placing ads, including graphic design, search engine marketing and web campaign planning. Web hosting and domain registration are excluded.
Sal The same law made custom software, custom website development, IT support, security, temporary staffing and live presentations retail sales too.
Sal Sales are sourced to where the customer receives the service. For ads, DOR's interim guidance says that's generally where the audience first sees the result.
Sal DOR says legal challenges to the law are ongoing, and until a court rules, taxpayers must keep collecting and reporting under its current guidance. Cities will also update their B and O ordinances again, for January first, twenty twenty-seven. And under current law, on January first, twenty twenty-nine, the sales tax on the other services is set to end. Advertising stays.
Sal Pay late, and the penalty runs nine, then nineteen, then twenty-nine percent in total.
Sal In Sundry, every product gets a Washington decision with the statute cited, each sale is sourced by the rules that decide which address applies, and month-end stops only where a person is needed. Then your client signs off on the Sundry Worksheet.
Dana An agency that never charged sales tax now needs a bookkeeper who gets it. That's a practice I can grow.
Rory Agencies sell creativity, not tax compliance. Their bookkeeper shouldn't be doing this by hand.