Act Now: SB 5814 Is Impacting Your Business — Tell Lawmakers Before December 4, 2025
Washington’s new digital services tax, SB 5814, is already creating significant challenges for advertising and creative professionals across the state. With the House Finance Committee reviewing its implementation on December 4, now is the time for our community to speak up. Read how to contact lawmakers and share the real impact this bill is having on your work and your business.
Dear AAF Members & Community,
As you are likely already aware, SB 5814 took effect in October of this year. The revisions to Washington's tax law have profound and far-reaching adverse impacts on advertising, marketing, public relations, and communications firms across the state. This newly applied tax made Washington-based agencies and practitioners less competitive in an already tight market, and creates administrative challenges and confusion. The WA DOR, though attempting to provide guidance, is struggling to clarify administrative questions because of the law's confusing nature. This new tax could cost jobs and even force some small or boutique firms out of business or out of this state. Professionals in our community are not alone in the collateral damage of this shortsighted bill - event planners, commercial filming, and tourism are also struggling to mitigate the impact it has on their industries as well.
This THURSDAY, DECEMBER 4, 2025, at 1:30 PM, the House Finance Committee has an agenda item "Implementation of Senate Bill 5814."
YOUR VOICE CAN MAKE A DIFFERENCE.
You are encouraged to reach out to the committee and original bill sponsors with comments and recommendations ahead of their meeting. Personal examples of how this bill is impacting you, your employees, your business, and your community of professionals work best. However, if you only have time for a phone call, you can ask them to repeal the law and rewrite one with the consultation and advice of the professionals it impacts.
Below is a list of committee members and their contact info, as well as the original bill sponsors who have an opportunity next session to bring this back to committee for repeal or modification. You will also find an email letter template that you are free to use to help craft your message. Make your voices heard by reaching out to each committee member with your concerns and recommendations. AAF Seattle will be doing the same on behalf of all our community and membership across Washington State.
Committee Members
| Member | District | Phone | |
|---|---|---|---|
| Berg, April (D) Chair | 44 | 360-786-7892 | |
| Street, Chipalo (D) Vice Chair | 37 | 360-786-7838 | |
| Orcutt, Ed (R) Ranking Minority Member | 20 | 360-786-7990 | |
| Jacobsen, Cyndy (R) Assistant Ranking Minority Member | 25 | 360-786-7968 | |
| Abell, Hunter (R) | 7 | 360-786-7988 | |
| Chase, Rob (R) | 4 | 360-786-7984 | |
| Mena, Sharlett (D) | 29 | 360-786-7996 | |
| Parshley, Lisa (D) | 22 | 360-786-7992 | |
| Penner, Joshua (R) | 31 | 360-786-7866 | |
| Ramel, Alex (D) | 40 | 360-786-7970 | |
| Santos, Sharon Tomiko (D) | 37 | 360-786-7944 | |
| Scott, Shaun (D) | 43 | 360-786-7920 | |
| Springer, Larry (D) | 45 | 360-786-7822 | |
| Walen, Amy (D) | 48 | 360-786-7848 | |
| Wylie, Sharon (D) | 49 | 360-786-7924 |
Bill Sponsors
| Sponsor | District | Phone | |
|---|---|---|---|
| Frame, Noel (D) | 36 | 360-786-7670 | |
| Trudeau, Yasmin (D) | 27 | 360-786-7652 | |
| Alvarado, Emily (D) | 34 | 360-786-7667 | |
| Nobles, T'wana (D) | 28 | 360-786-7654 | |
| Pedersen, Jamie (D) | 43 | 360-786-7628 | |
| Valdez, Javier (D) | 46 | 360-786-7690 | |
| Wilson, Claire (D) | 30 | 360-786-7658 |
Take Part in the Work
If you want to help shape how Washington’s creative sector responds to SB 5814, we invite you to join AAF Seattle’s Government Affairs & Advocacy Committee, a group working year-round to support, protect, and elevate the region’s creative community.
Navigating the New Digital Services Tax Law — SB5814
Washington’s creative and advertising community came together once again on October 8 for AAF Seattle’s virtual forum, Navigating the New Digital Services Tax Law — SB 5814, a timely and urgently needed conversation about the state’s sweeping new tax requirements for advertising and digital services.
Washington’s creative and advertising community came together once again on October 8 for AAF Seattle’s virtual forum, Navigating the New Digital Services Tax Law — SB 5814, a timely and urgently needed conversation about the state’s sweeping new tax requirements for advertising and digital services.
Building on the momentum of August’s Founders Roundtable, this session broadened the audience, drawing agency leaders, production teams, freelancers, strategists, in-house marketers, and students. The turnout reflected a community still grappling with how to interpret and implement the law, and hungry for clarity, guidance, and a sense of solidarity.
What unfolded was an informative, candid, and at times sobering discussion featuring the Washington State Department of Revenue (DOR) and tax attorneys from Ballard Spahr, who together provided practical insights, examples, and warnings about what lies ahead for businesses navigating SB 5814.
A Community Seeking Answers
Before the program began, a series of live polls offered a snapshot of the room and painted a clear picture of where people stand.
When asked how prepared attendees felt for compliance, the majority said they had taken only “small steps,” others admitted they don’t know where to start, and only a handful said they felt fully ready. Several attendees reported that the law has already caused them to lose business, echoing the concerns expressed during the August roundtable.
One of the most striking responses came from the advocacy poll, where many participants said they would like to contact their legislators but don’t know how — and several admitted the thought hadn’t yet crossed their minds. This reinforced a theme that ran throughout the event: the need for collective action, shared resources, and clear on-ramps for civic engagement. By the final poll, every attendee asked for more forums like this one.
Setting the Stage
AAF Seattle President Valentina Gómez-Bravo opened the event by reinforcing the organization's mission: to educate, advocate, and unify the region’s creative industries. She grounded the conversation in both urgency and optimism, noting the community’s strong response to the first roundtable and previewing upcoming AAF Seattle events and advocacy efforts.
Government Affairs Director Thomas Ackels then framed the session: this was not simply an informational meeting, but an opportunity to understand, clarify, and prepare for the future. With the law now in effect, the focus had shifted from speculation to implementation — and to helping businesses of all sizes navigate the complexities ahead.
The panel featured representatives from the Washington State Department of Revenue, including Lalo Mendoza from the TPS Education & Outreach Team and tax law expert Darlene Warner, alongside Aaron Johnson and Brett Durbin, partners at Ballard Spahr LLP who co-lead the firm’s State and Local Tax team. Each panelist brought a unique perspective: the Department of Revenue provided insights focused on enforcement and interpretation of tax regulations, while Ballard Spahr contributed legal strategies and cautionary guidance, creating a well-rounded discussion on state and local tax issues.
What the Law Actually Does, and What It Means
The DOR led the group through an overview of the law, starting with the basics: as of October 1, 2025, many advertising and digital services are newly subject to retail sales tax and retail Business and Occupation (B&O) tax.
This includes digital advertising, agency services, creative and pre-production services, custom software, website development, and IT and digital services. Several longstanding exemptions were repealed, including the exemption for newspaper advertising, meaning that even legacy media categories will experience shifts in how they handle sales tax.
DOR repeated one theme throughout the session: They cannot change the law — they can only interpret and enforce it.
This reality shaped the tone of the morning: practical guidance within nonnegotiable constraints.
The Heart of the Confusion: Sourcing
The most complex part of the law — and the area that drew the most questions — is sourcing, or determining where the buyer “receives” the service.
DOR explained:
Pre-dissemination services (e.g., creative development) are received where the client first uses the deliverable.
Dissemination services (e.g., placing ads) are sourced where the advertisement appears to the intended audience.
Real-world examples underscored the complexities involved in sourcing decisions, particularly when national campaigns, multi-state companies, creative work produced in Seattle for nonlocal clients, and work distributed across digital platforms blur the lines of client location. This situation places the burden on businesses to justify, document, and allocate appropriately. The Department of Revenue (DOR) emphasized that reasonable methods for allocation are allowed, documentation is essential, and businesses may request binding rulings when interpretation is unclear. Additionally, a “grace period” exists for certain pre-existing contracts to provide some leeway during this transition.
Still, the overarching message was clear: the law is difficult to apply, and businesses must prepare for that.
Legal Perspectives and Warnings
Ballard Spahr attorneys expanded on the challenges businesses face by highlighting several critical issues, including the risks associated with incorrect sourcing, the steep penalties for misuse of reseller permits, and the complications arising from “bundled” transactions. They also addressed conflicting interpretations between statute and practice, potential First Amendment concerns, and the heightened risk of audits, particularly as the Department of Revenue responds to increased demand for rulings. Additionally, they noted the possibility that future regulations could extend into related digital areas. Their guidance was clear and practical: businesses must thoroughly document all transactions, avoid overly broad use of reseller permits, rely on well-crafted contracts to clarify sourcing, and ensure that taxable and nontaxable services are clearly separated.
A System That’s Straining Small Businesses
A recurring theme of both the DOR presentation and legal commentary was the disproportionate impact of the law on small- to mid-sized businesses. All participants voiced concerns about the administrative burden, loss of competitiveness with out-of-state firms, client confusion, rate increases that make Washington agencies appear 10% more expensive overnight, inconsistent application for digital campaigns, difficulty tracking service location, and the increased labor needed for accounting and documentation.
We closed the conversation by reinforcing that the community’s perspectives matter and that now is the moment to reach out to legislators, share real-world impact, and advocate for solutions that support Washington’s creative economy.
A Call for Ongoing Conversation
The strongest signal of the day came at the end when every attendee asked for more forums like this one. At AAF Seattle we are committed to:
Continuing educational events
Sharing updated resources as the DOR releases more guidance
Providing templates for outreach
Offering advocacy pathways for those unsure of where to begin
Keeping the conversation going as the law evolves
Take Part in the Work
If you want to help shape how Washington’s creative sector responds to SB 5814, we invite you to join AAF Seattle’s Government Affairs & Advocacy Committee, a group working year-round to support, protect, and elevate the region’s creative community.
Recap: Founders Roundtable on SB 5814
On August 28, AAF Seattle hosted the first Founders Roundtable of the year — a gathering of industry leaders from across Seattle’s advertising, communications, media, and creative industries. The focus: SB 5814, Washington’s new digital and tech services tax bill, and its far-reaching implications for how agencies operate, price, and invoice.
On August 28, AAF Seattle hosted the first Founders Roundtable of the year — a gathering of industry leaders from across Seattle’s advertising, communications, media, and creative industries. The focus: SB 5814, Washington’s new digital and tech services tax bill, and its far-reaching implications for how agencies operate, price, and invoice.
This event was more than a meeting — it was an opportunity for our community to come together, share perspectives, and begin to chart a collective path forward.
Key Themes from the Roundtable
1. Immediate impact on operations
Attendees voiced concerns about the practical challenges of implementing the tax: rebuilding invoicing systems, separating taxable vs. non-taxable services, training staff, and communicating changes to clients. Many anticipated higher overhead costs, disrupted contracts, and client confusion, with one group noting the likelihood that “clients pay more, get less, or leave.”
2. Competitiveness and long-term risks
A central theme was the uneven playing field this law creates between Washington-based firms and out-of-state agencies. Participants worried that local invoices will appear 10% higher, driving clients — especially cost-sensitive nonprofits and startups — to move their work elsewhere. The administrative burden of tracking where services are delivered and renegotiating contracts was seen as a significant risk for smaller agencies.
3. Advocacy and support needs
The group emphasized the importance of AAF Seattle’s role in supporting members through clear communication, advocacy templates, and ongoing forums for knowledge-sharing. Requests included legal/accounting guidance, model client communications, and coordinated messaging to legislators. Attendees agreed that a united front is essential to amplify the industry’s perspective in Olympia and beyond.
4. Collective ideas and solutions
Groups brainstormed both short- and long-term strategies:
Developing a shared fact sheet/FAQ and client-facing materials to reduce confusion.
Partnering with local chambers of commerce, civic organizations, and policy groups to broaden advocacy.
Collaborating with industries already mobilizing (e.g., Washington Filmworks).
Exploring collective compliance tools and shared resources to reduce cost burdens.
Focusing near-term efforts on shaping DOR guidance, seen as a quicker lever than legislative repeal.
Next Steps
Looking ahead, attendees outlined clear priorities:
Continue to press for clarity in DOR guidance (expected in early September).
Engage with AAF National’s Government Affairs team on litigation and legislative advocacy.
Mobilize through coordinated outreach to Washington State representatives.
Create ongoing opportunities for education, collaboration, and shared action.
Resources & Notes
We’ve compiled the full set of notes, questions, and group ideas from the roundtable into a resource deck:
👉 [View the deck from the Founders Roundtable]
Other resources
Engrossed Substitute Senate Bill 5814, Laws of 2025, Chapter 422 (ESSB 5814)
Interim guidance statement regarding changes made by ESSB 5814 for Advertising Services
Thank You
Thank you to all the community members who joined us for this critical conversation. Your candor, ideas, and collaboration are shaping how Seattle’s creative community navigates this challenge together.
Special thanks to C+C for hosting us for this important event.
Join the next conversation.
Register for our follow-up session, Navigating the New Digital Services Tax Law — SB 5814, on October 8, 2025, where we’ll review the DOR’s official guidance, answer questions, and continue building momentum.