""There is virtually no business that wouldn't be affected by this in some way," said Grant Shaver, principal at Seattle-based accounting consultant Clark Nuber. He said it's the biggest tax-related change he's seen in his career."
""There are a lot of parts about this bill that are just evidence that it was not well thought through," Shaver said."
""Expect compliance chaos for the next year," he said."
Senate Bill 5814 reclassifies many activities as retail sales, making advertising services, IT services, custom website development, live presentations, and custom software licensing subject to sales tax. The Department of Revenue estimates more than 90,000 Washington businesses are affected. Tax liability is determined by where the customer receives the service, not where work is performed. Businesses are evaluating whether specific services meet the new taxable categories and how to determine in-state sales. Interim guidance from the Department of Revenue has been released. Many businesses expect significant compliance, classification challenges, and potential overpayment to avoid audit risk.
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