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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.
Temporary staffing services
Starting Oct. 1, 2025, temporary staffing services are subject to Washington retail sales tax. If you sell these services in Washington, you must collect and submit sales tax.
What’s included
Temporary staffing service means providing workers to other businesses for limited periods of time to supplement their workforce and fill employment vacancies on a contract or a fee basis.
To be taxable as “temporary staffing services,” Revenue will consider whether the taxpayer meets all of the following factors:
- The taxpayer recruits and hires their own employees;
- The taxpayer finds other organizations that need the services of those employees;
- The taxpayer assigns those employees on a temporary basis to perform work at or services for the other organizations to support or supplement the other organizations' workforces, or to provide assistance in special work situations such as, but not limited to, employee absences, skill shortages, seasonal workloads, or to perform special assignments or projects, all under the direction and supervision of the customer; and
- The taxpayer customarily attempts to reassign the employees to other organizations when they finish each assignment.
What’s NOT included
- Providing workers to hospitals licensed under chapter 70.41 or 71.12 RCW.
- Direct hires (even if hired for a temporary duration).
- Independent contractors.
- Paymaster relationships.
- Outsourcing to third-party independent contractors.
For detailed scenarios and examples, review our Temporary Staffing Services Interim Guidance.