Washington compliance for digital creators

Executive summary (what a Washington-based or WA-facing digital creator must know now) - Formation & registration: File a Certificate of Formation with the Washington Secretary of State (fee ~ $200 online / $180 by mail).

Washington LLCs must file an Annual Report each year (fee $60; due by the end of the LLC’s formation anniversary month). Washington businesses receive a UBI (Unified Business Identifier) and should obtain an EIN from the IRS.

Also, recent federal BOI rules require Beneficial Ownership Information (FinCEN) reporting for newly formed LLCs. - State business license & registration: Most sellers and service providers must register with the Washington Department of Revenue (Business Licensing Service) to obtain a state business license/UBI and to report B&O tax and collect sales tax when applicable. - Taxes: Washington has no state personal income tax, but it taxes business activity: the Business & Occupation (B&O) gross receipts tax and retail sales tax.

Washington’s B&O and retail sales tax rules can apply to digital goods and services. Economic nexus rules require out-of-state sellers to register if they have sufficient Washington-sourced gross receipts (commonly cited threshold: $100,000 in combined gross receipts sourced to WA).

Filing frequency (monthly/quarterly/annual) depends on tax liability. - Recent legislative change (critical): ESSB 5814 (effective Oct 1, 2025) broadened Washington’s retail sales tax and retailing B&O tax to include many services used by businesses — including digital advertising, custom website development, certain IT/data processing services, and other digital/tech services.

This materially increases the range of services that can be taxable in Washington and affects creators who provide digital services or sell advertising/marketing-related services to Washington customers. - Digital product/service taxability: Washington treats many digital products and digital automated services (DAS) as taxable in many circumstances.

Prewritten software and many remotely accessed software/digital services are typically taxable; truly custom software remains generally non-taxable if it meets the state’s “custom software” rules. Washington provides sourcing rules and certain exemptions (e.g., Multiple Points of Use (MPU) allocation or reseller exemptions) that may apply when customers or users are in multiple states. - Marketplace facilitator & platform rules: Marketplace facilitator rules require many marketplaces to collect and remit sales tax on third-party sales — creators selling via major marketplaces may be covered by marketplace collection rules, reducing direct collection burdens but not necessarily eliminating B&O and reporting obligations. - Employment and contractors: If you hire employees or have payroll in Washington, you must register for unemployment insurance, workers’ compensation (Department of Labor & Industries), payroll tax withholding, and comply with state employment law.

Washington’s wage-and-hour and independent contractor rules may differ from federal tests; classify workers carefully and consult WA L&I / Employment Security guidance. - Privacy & consumer protection: Washington has active privacy and consumer protection enforcement (Attorney General); recent state privacy law and regulatory developments (post-2023) may affect data collection and notice requirements for creators who collect personal data (especially large-scale collection, targeted advertising, or selling data).

Creators should follow best practices and monitor WA Attorney General guidance and DOR/legislature updates. - Recordkeeping & audits: Keep complete records (gross receipts, invoices, exemption certificates, reseller permits, contracts, sourcing documentation).

The WA Department of Revenue expects at least five years of records for tax purposes. Maintain clear documentation for contracts that predate tax law changes (ESSB 5814 includes specific guidance on existing contracts and transition rules).

Actionable checklist for Washington digital creators / creator LLC founders 1) Formation & basic filings - Decide business structure; if forming LLC in WA: file Certificate of Formation with WA Secretary of State (fee ~$200 online).

Obtain Registered Agent in WA. Draft an Operating Agreement even if not required.

File Beneficial Ownership Information (FinCEN) within required timeframe. - File the Washington Annual Report every year (fee $60).

Executive summary (what a Washington-based or WA-facing digital creator must know now) - Formation & registration: File a Certificate of Formation with the Washington Secretary of State (fee ~ $200 online / $180 by mail).

Washington LLCs must file an Annual Report each year (fee $60; due by the end of the LLC’s formation anniversary month). Washington businesses receive a UBI (Unified Business Identifier) and should obtain an EIN from the IRS.

Also, recent federal BOI rules require Beneficial Ownership Information (FinCEN) reporting for newly formed LLCs.

- Taxes: Washington has no state personal income tax, but it taxes business activity: the Business & Occupation (B&O) gross receipts tax and retail sales tax. Washington’s B&O and retail sales tax rules can apply to digital goods and services.

Economic nexus rules require out-of-state sellers to register if they have sufficient Washington-sourced gross receipts (commonly cited threshold: $100,000 in combined gross receipts sourced to WA). Filing frequency (monthly/quarterly/annual) depends on tax liability. - Recent legislative change (critical): ESSB 5814 (effective Oct 1, 2025) broadened Washington’s retail sales tax and retailing B&O tax to include many services used by businesses — including digital advertising, custom website development, certain IT/data processing services, and other digital/tech services.

This materially increases the range of services that can be taxable in Washington and affects creators who provide digital services or sell advertising/marketing-related services to Washington customers.

- Privacy & consumer protection: Washington has active privacy and consumer protection enforcement (Attorney General); recent state privacy law and regulatory developments (post-2023) may affect data collection and notice requirements for creators who collect personal data (especially large-scale collection, targeted advertising, or selling data).

Creators should follow best practices and monitor WA Attorney General guidance and DOR/legislature updates. - Recordkeeping & audits: Keep complete records (gross receipts, invoices, exemption certificates, reseller permits, contracts, sourcing documentation).

The WA Department of Revenue expects at least five years of records for tax purposes. Maintain clear documentation for contracts that predate tax law changes (ESSB 5814 includes specific guidance on existing contracts and transition rules).

Actionable checklist for Washington digital creators / creator LLC founders 1) Formation & basic filings - Decide business structure; if forming LLC in WA: file Certificate of Formation with WA Secretary of State (fee ~$200 online).

Obtain Registered Agent in WA. Draft an Operating Agreement even if not required.

File Beneficial Ownership Information (FinCEN) within required timeframe. - File the Washington Annual Report every year (fee $60).

• State business license & registration: Most sellers and service providers must register with the Washington Department of Revenue (Business Licensing Service) to obtain a state business license/UBI and to report B&O tax and collect sales tax when applicable.
• Digital product/service taxability: Washington treats many digital products and digital automated services (DAS) as taxable in many circumstances. Prewritten software and many remotely accessed software/digital services are typically taxable; truly custom software remains generally non-taxable if it meets the state’s “custom software” rules. Washington provides sourcing rules and certain exemptions (e.g., Multiple Points of Use (MPU) allocation or reseller exemptions) that may apply when customers or users are in multiple states.
• Marketplace facilitator & platform rules: Marketplace facilitator rules require many marketplaces to collect and remit sales tax on third-party sales — creators selling via major marketplaces may be covered by marketplace collection rules, reducing direct collection burdens but not necessarily eliminating B&O and reporting obligations.
• Employment and contractors: If you hire employees or have payroll in Washington, you must register for unemployment insurance, workers’ compensation (Department of Labor & Industries), payroll tax withholding, and comply with state employment law. Washington’s wage-and-hour and independent contractor rules may differ from federal tests; classify workers carefully and consult WA L&I / Employment Security guidance.

State registrations - Register with WA Department of Revenue/Business Licensing Service to obtain a UBI and register for B&O tax and retail sales tax (if selling taxable goods/services or meeting nexus thresholds). - If hiring, register with Employment Security and Labor & Industries for payroll/unemployment/workers’ comp.

Taxes & collection - Determine whether your products/services are taxable in Washington. Key points

• Post-10/1/2025 ESSB 5814, many digital advertising, IT, and custom website services can be taxable. Review DOR guidance and your contracts. • Prewritten software, digital automated services, streaming, downloads, SaaS frequently are taxable; custom software development commonly is not taxable when it qualifies as custom. • Marketplace sellers: check whether a marketplace facilitator collects sales tax on your sales. - If you hit economic nexus ($100,000+ WA-sourced receipts) or have physical presence, register and start collecting sales tax and report B&O tax. - Understand filing frequency (monthly/quarterly/annual) determined by tax liability. 4) Contracts & pricing - Review contracts and invoices for tax-inclusive vs tax-exclusive pricing and consider contract modification timing given ESSB 5814 transition rules (there is limited protection for unaltered contracts signed prior to Oct 1, 2025 through March 31, 2026 or other transition timing—check WA DOR interim guidance).

Privacy, advertising & disclosures - Follow FTC rules for influencer disclosures and endorsement transparency (federal). Monitor Washington AG privacy guidance and state privacy laws for obligations on data handling and notices.

Recordkeeping & audit readiness - Keep at least five years of records; retain reseller certificates, exemption paperwork, sourcing and user-location evidence, and B&O/sales tax filings.

When to get professional help - If you

(a) sell advertising/IT services or SaaS to WA customers; (b) exceed $100k WA-sourced receipts; (c) use marketplaces; or (d) are uncertain whether software/services are taxable — consult a Washington tax specialist (CPA/tax attorney) or enroll with sales tax automation. Recommended next steps for the user (practical and prioritized) 1) Immediate (within 1–2 weeks) - If you already operate or expect customers in Washington: determine whether you meet economic nexus ($100k WA-sourced receipts) or have physical presence. If yes, register with WA DOR (Business Licensing Service) to get a UBI and sales/B&O accounts. - If forming an LLC in WA: file Certificate of Formation with WA SOS, secure a registered agent, obtain an EIN, and plan to file BOI with FinCEN. - Review active contracts for services to WA customers and note whether ESSB 5814 changes could alter tax treatment; consult WA DOR interim guidance for transition rules. 2) Short-term (1–3 months) - Classify your products/services (digital downloads, SaaS, custom development, ads, affiliate revenue) and map which sales are likely taxable under WA rules. Begin collecting sales tax only after registration/notification per WA DOR rules. - If using marketplaces, confirm whether marketplace facilitator rules mean the marketplace will collect/remit WA sales tax on your behalf. - Implement recordkeeping processes to retain evidence of sourcing (customer locations, user IP/addresses, shipping addresses) for tax sourcing. 3) Ongoing - Monitor Washington DOR guidance and ESSB 5814 implementing rules, and consult a WA tax advisor for complex/advisory matters (especially digital ad sales, data/analytics services, or bundled service/software contracts). Limitations and caveats - This summary synthesizes official guidance and reputable secondary sources, but it is not legal or tax advice. Taxability can depend on factual details (how a product/service is delivered, contract language, how charges are stated), so specific transactions may be taxed differently. Washington’s rules changed in late 2025 (ESSB 5814) and DOR guidance is evolving; check WA DOR interim and final guidance for specifics.