Sales tax now applies to some services

Starting October 1: Some business services are now subject to retail sales tax, as required by state law, ESSB 5814. When you buy these services, vendors should add sales tax to your bill. If you sell these services, you should begin collecting retail sales tax. Learn more about Services newly subject to retail sales tax.

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Child welfare services

The Department of Social and Health Services (DSHS) contracts with multiple private providers to purchase various child welfare services. DSHS uses a lead-agency model when contracting for child welfare services. Under the lead-agency model, services may be provided directly by the lead agency or through subcontracts and agreements with service providers.

Payments for child welfare services under a government funded program are not subject to B&O tax. Health or social welfare organizations, as well as lead-agencies, should report their gross income under the Service and Other Activities classification of the B&O tax and then take an “Other” deduction with a description such as “Government funded child welfare program.”

References

  • RCW 82.04.431 Health or social welfare organization defined – Conditions for exemption – Health or social welfare services defined
  • RCW 74.13.020 Definitions (child welfare services)