If the state’s recent expansion of sales tax-subject services has your business facing some penalties, some help could be available to you. 

The Washington State Department of Revenue is offering a temporary penalty relief program for businesses affected by the recent retail sales tax changes for services. 

Passed by the Legislature in 2025, the new law made temporary staffing services and live presentations subject to sales tax collections, among other changes. 

Because “many businesses faced challenges understanding and implementing the changes before the law took effect,” the state will waive certain penalties for businesses that voluntarily report and pay retail sales tax and use tax owed because of these changes under the following conditions: 

• Uncollected retail sales tax and unpaid use tax resulting from the changes changes. 
• Reporting periods from Oct. 1, 2025, through Dec. 31, 2026. 

Businesses may qualify if they owe retail sales tax or use tax due to the changes and submit an application for penalty relief by Sept. 30, 2027.  

For preexisting contracts that qualify for temporary sales tax relief, penalty relief begins when the contract no longer qualifies for temporary relief or on April 1, 2026, whichever occurs first. Relief ends Dec. 31, 2026. 

All requests for penalty relief must be submitted through the department’s online application. 

Go to: https://dor.wa.gov/taxes-rates/retail-sales-tax/services-newly-subject-retail-sales-tax/essb-5814-penalty-relief-program