Washington state passes bill to tax digital advertising services

Washington state lawmakers have passed a bill requiring ad agencies to collect sales tax on digital advertising services. If approved, the bill (SB 5814) would force agencies in Washington to collect 7.5% to 10.6% sales tax when providing services like creating digital ads, analyzing performance, or planning online campaigns. 

The bottom line: Most states don’t tax digital advertising services yet. In recent years, as digital ad revenue has grown, states have explored specialized digital ad taxes based on gross receipts rather than traditional sales taxes. Washington’s bill could become influential, as the state’s tax policies (which often reflect input from major tech companies) have previously set precedents for other states expanding into digital taxation.