Washington’s New Advertising Tax: Navigating Complex Sourcing Rules for Digital Services

• Washington’s sales tax on advertising services starts October 1, 2025, covering digital automated services and retail sales of advertising services.
• Washington is one of the few states taxing advertising services, alongside Hawaii and New Mexico.
• As a member of the Streamlined Sales Tax Governing Board, Washington follows the Streamlined Sales and Use Tax Agreement’s sourcing rules.
• The sourcing hierarchy involves sourcing sales to the seller’s location, the purchaser’s location, or the purchaser’s address in the seller’s records.
• The Washington Department of Revenue is developing guidance on sourcing sales of internet advertising services.
• There is uncertainty about whether sales should be sourced to where ads are viewed or to the purchaser’s headquarters.
• The complexity of sourcing internet ads could create significant administrative challenges for sellers.

Source: insidesalt.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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