On March 30, legislation in Washington that would eventually repeal the state’s retail sales tax treatment of temporary staffing services was signed into law by Gov. Bob Ferguson. The legislature passed the bill shortly before adjourning for the year March 12.
Last year, Washington lawmakers enacted new tax provisions that reclassified temporary staffing services as retail sales, part of a broader effort to raise state revenue by expanding the sales tax base to certain services. ASA and other industry representatives raised concerns that applying retail sales tax to staffing services would effectively increase the cost of labor by 6.5%, plus local taxes, particularly affecting industries that rely heavily on contingent labor. Health care providers, manufacturers, logistics companies, and other employers warned that the change could make it more expensive to address workforce shortages.
The bill, SSB 6346, was one of several technical correction bills considered this session. Among other provisions, the bill creates targeted exemptions for certain sectors, including hospital-based clinical staffing arrangements and certain services purchased by schools and educational entities, and includes a provision repealing the broader service tax expansion beginning Jan. 1, 2030.
Home