Sales & Use Tax Updates (08.05.26)-Sales & Use Tax Updates PowerPoint

Sales & Use Tax Updates PowerPoint

Pdf Summary

Washington State’s Department of Revenue presented a 2026 tax law update focused on sales tax, use tax, and business & occupation (B&O) tax, with special attention to schools and libraries. The presentation reviewed how B&O tax applies to business activity, how retail sales tax is collected from consumers on tangible goods and certain services, and how use tax applies when sales tax was not paid on items used in Washington.<br /><br />For schools, the update distinguished between nonenterprise activities, which support education and are not run like private businesses, and enterprise activities, which compete with private businesses and are taxed accordingly. Examples were provided for each category, including school meal sales, event admissions, facility rentals, student stores, photographs, class rings, and yearbooks.<br /><br />A major legislative change effective July 1, 2026, expands sales tax to certain services, including temporary staffing services, live presentations, and purchases by schools and libraries. However, schools and libraries receive a new exemption for several purchases, such as information technology services, custom software, custom website development, live presentations, investigation/security services, armored car services, and temporary staffing. Special definitions and exclusions were noted for temporary staffing and live presentations.<br /><br />Another change effective Jan. 1, 2029, removes several services from the definition of a retail sale, including IT services, custom website development, custom software customization, data processing, security-related services, temporary staffing, and live presentations.<br /><br />The presentation also summarized interim guidance on advertising services, defining them broadly to include creation, production, and dissemination of ads across digital and nondigital media, while excluding certain media-related services and out-of-home advertising categories. Resources and contact information were provided for tax help and letter rulings.

Keywords

Washington State

Department of Revenue

sales tax

use tax

B&O tax

schools and libraries

temporary staffing

live presentations

custom software

advertising services