Starting October 1, 2025, businesses in the digital advertising and data processing sectors will need to account for a new tax. The Washington State Legislature passed Senate Bill 5815 to modify the application of retail sales tax to include, among other services, advertising and data processing.

Questions remain around the implementation and legality of the law, but businesses engaged in these services should prepare for compliance now given the limited runway before the law takes effect.

Scope of the Tax

The law reclassifies digital advertising and data processing as a “retail transaction,” subjecting a wide range of services to Washington’s retail sales tax. Taxable advertising services now include activities related to creating, producing, and placing ads, including design, produc

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