- Washington State will extend sales tax to many professional services starting October 1, 2025.
- This change aims to address a $16 billion budget shortfall and alters tax obligations for service providers.
- Previously, services were only subject to the Business & Occupation (B&O) tax.
- New legislation adds a 6.5% state sales tax, plus local taxes, potentially exceeding 10% in some areas.
- Affected services include legal, accounting, marketing, IT consulting, architectural, and design services.
- Economic nexus standards apply, requiring out-of-state businesses with $100,000+ in receipts from Washington clients to collect tax.
- Services to out-of-state clients are not taxed, but sourcing rules are crucial for compliance.
- Businesses should review sales data, update billing systems, revise client agreements, and train staff for compliance.
- Immediate action is necessary to avoid noncompliance and financial issues.
Source: leyton.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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