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Dear Cultural Partners,
We are reaching out today to provide an update on the state's expansion of retail sales tax. We urge you to review this email. These new taxes may affect your cultural programming and increase some of your business expenses.
Background:
Last April, the State Legislature passed Engrossed Substitute Senate Bill (ESSB) 5814 during the final days of the 2025 Legislative Session. As you may recall, the session was extremely challenging. A looming $16 billion dollar deficit was projected over the next 4 years, so lawmakers and the Governor weighed various options to cut expenses and increase state revenues to deliver a balanced budget.
Overview of the new taxes:
Starting October 1, 2025, the collection of retail sales tax in our state will expand to include various services. NEW! Review the list of new taxes below and click on the links to see the most current guidance for those areas.
To understand how this applies to contracts in effect on October 1, 2025, please see the interim guidance.
Tax guidance may be updated and expanded over the next few weeks, so stay abreast of any changes by checking this page on the WA Department of Revenue Website.
Why this matters:
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If you purchase these services, you will see increased costs.
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If you sell them, you will be responsible for collecting and remitting sales tax.
Join our webinar to learn more and share your questions!
September 23rd, 12:30 pm
ArtsWA, Inspire WA, Washington Festivals and Events, and the Washington State Department of Revenue are hosting a webinar on Senate Bill 5814. This session is designed to help you understand how this new legislation affects your cultural organization, festival, event or business. Who qualifies as a “seller” or “purchaser” under the new law? What steps do you need to take to prepare for October 1st? Register here!
What's next for advocacy on this issue?
We are happy that DOR's recent guidance has clarified that most "performances" aren't subject to the tax. However, we are concerned about "presentations" when interactions occur between audience and presenter (like cultural/arts education classes, workshops, and seminars).
We are meeting with key members of the Legislature to better understand their intent with this law and discuss the impact on our cultural partners. Our cultural sector may not have been the target for new revenues but the consequences may be a significant weight on our under-resources businesses. We are passionate about sharing your story and concerns!
Can cultural sector nonprofits be exempted from the tax? Maybe later but not this year. Only the Legislature (not the Dept. of Revenue) may amend existing state laws during their January to March session. We will likely develop a request to minimize the impact on cultural sector businesses so we will need your advocacy to secure the solution. Right now, it's too early to share more about what that request may be.
We know this is another hurdle for you to overcome. We will forge forward with your needs and concerns in mind! Please reach out if you have any further questions but we urge you to attend the webinar to hear directly from the Department of Revenue.
In solidarity,
Manny Cawaling
Executive Director
manny@inspirewashington.org
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