Washington Department of Revenue 2025 Tax Updates Roll Out
The Washington Department of Revenue 2025 tax updates introduce major changes to how businesses calculate, file, and pay taxes through the My DOR online system. The updates expand retail sales tax to additional services, revise definitions of digital tax, and reinforce electronic filing and payment deadlines beginning later this year.
Starting October 1, 2025, Washington will require businesses to collect retail sales tax on several service categories that were previously exempt. The expansion marks one of the most significant shifts in the state’s sales tax structure and will affect a wide range of service-based businesses.
Newly taxable services include information technology support and consulting, custom website development, advertising services such as campaign planning and lead generation, live presentations with real-time interaction, investigation and security services, temporary staffing services, and custom software development and customization. Sellers must collect sales tax at the point of sale and report those transactions through the My DOR system.
The Department of Revenue has published interim guidance and service-specific explanations to help businesses determine whether their activities fall under the expanded tax requirements. Buyers should expect sales tax to appear on invoices for affected services after the effective date.
In parallel with the service tax expansion, Washington is modifying how it defines and taxes digital automated services. Several exclusions that previously applied to advertising services, live digital presentations, and certain data-processing activities will be eliminated as of October 1, 2025.
Despite the broader changes, the updated law explicitly excludes telehealth and telemedicine services from retail sales tax. According to the Department of Revenue guidance, healthcare providers offering virtual care services will continue to operate under the existing exemption. They will not be subject to the revised digital tax framework.
Multiple business and occupation tax changes are scheduled to take effect across 2025 and 2026. Recent legislation modifies certain B&O tax rates, adjusts existing surcharges, and establishes a new temporary surcharge for large companies, with effective dates varying by provision.
Beginning January 1, 2026, a separate measure introduces a new B&O tax rate and deduction for income earned from payment card processing services. Businesses impacted by these changes are expected to review their classifications and ensure the correct rate is applied when filing through My DOR.
The Washington Department of Revenue continues to require electronic filing and payment for most taxpayers. For 2025, My DOR users submitting payments by ACH debit must complete transactions by 11:59 p.m. Pacific Time on the applicable due date to avoid penalties.
Businesses using EFT credit payments must ensure their financial institutions deposit funds into the state’s account by 5:00 p.m. Pacific Time on the due date. The department publishes a detailed schedule outlining monthly, quarterly, and annual electronic filing deadlines.
Taxpayers are advised to monitor system availability throughout the year. The Department of Revenue periodically schedules maintenance windows that temporarily restrict access to My DOR services.
One recent maintenance period ran from the evening of January 9 through the morning of January 12, 2026, during which online filing and payment systems were unavailable. Businesses are encouraged to plan filings and payments around announced outages.
Businesses affected by the Washington Department of Revenue's 2025 tax updates should review their service offerings, invoicing practices, and My DOR account settings well in advance of the October effective date. Updating taxability determinations, confirming filing frequencies, and scheduling payments early can reduce compliance risks.
The department advises taxpayers to monitor published guidance, subscribe to official updates, and seek clarification when necessary as Washington transitions to a broader service-based tax system.
By William Mc Lee, Editor-in-Chief & Tax Expert—Get Tax Relief Now
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