Tax insight

Washington provides additional guidance on IT services and custom website development services

Insight
5 minute read
September 30, 2025

What happened?

The Washington Department of Revenue issued interim guidance on September 12, 2025, regarding information technology (IT) services and custom website development services that are subject to the retailing business and occupation (retailing B&O) tax and retail sales tax effective October 1, 2025, as enacted by ESSB 5814.

Why is it relevant?

Effective October 1, 2025, ESSB 5814 expands the “retail sale” definition to include various services, including IT services and custom website development services, which now are subject to retailing B&O tax and retail sales tax as of the effective date.

For more information, see PwC’s Insight.

Actions to consider

Companies that provide IT services and custom website development services should carefully review service offerings to determine whether they will be taxable beginning October 1. Purchasers of these services should review vendor invoices for sales tax collected and to determine any use tax obligation.