Washington Governor Bob Ferguson signed SB 6346 on March 30, 2026, repealing sales tax on several services that became taxable in October 2025, including custom software, IT consulting, data processing, security services, and temporary staffing. The bill also raises small business B&O tax credits and doubles the B&O filing threshold to $250,000. All relief provisions take effect January 1, 2029, pending validation of WA’s new income tax in WA courts.

Additional bills make near-term changes: the data center refurbishment sales tax exemption ends July 1, 2026 (SB 6231), the B&O insurance exemption narrows retroactively to October 2019 (HB 2487), and new penny-rounding rules for in-person cash transactions take effect June 11, 2026 (HB 2334).

The bottom line: Businesses operating in Washington should review each bill's effective date and confirm how the service tax repeals, exemption eliminations, and B&O changes affect their specific tax obligations.