Washington’s New Sales Tax on Digital Advertising Services: Implications and Challenges for Businesses

• Washington’s sales tax on advertising services starts October 1, 2025.
• The tax applies to digital automated services and retail sales of advertising services.
• Washington is one of the few states taxing advertising services, along with Hawaii and New Mexico.
• Washington follows the Streamlined Sales and Use Tax Agreement’s sourcing regime.
• The sourcing regime uses a hierarchical approach to determine the location of sales.
• The Washington Department of Revenue is developing guidance on sourcing sales of advertising services.
• There is a focus on interpreting “receipt by the purchaser” and “known to the seller.”
• Internet advertising presents challenges in determining where the service is first used.
• The complexity of sourcing internet ads could increase administrative burdens.

Source: natlawreview.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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