Washington compliance for content monetization companies

I performed multi-source research to gather authoritative, state-specific compliance guidance for content monetization companies operating in Washington (formation, licensing, tax, labor, privacy, and practical next steps). Below is a consolidated summary of findings, legal changes to watch, and an actionable compliance checklist tailored for creators, platforms, and content monetization businesses doing business in Washington. Key findings and summary (sufficient to draft a comprehensive Washington-focused blog and newsletter): 1) Business formation & registration - Form the legal entity through the Washington Secretary of State (file Certificate of Formation for an LLC) and obtain a UBI (Unified Business Identifier). The SOS provides online filing instructions for domestic WA LLC formation. - Use the Washington Business Licensing Service (My DOR / Business Licensing) to apply for a state business license; the application can also handle many city license endorsements. The application asks about FEIN, whether you will hire employees, estimated gross revenue, and business activities; it registers you for state tax accounts and, if hiring, registers with L&I (workers’ comp) and ESD (unemployment insurance). - Practical action: obtain FEIN, form LLC or other entity with SOS (if applicable), then apply for state business license via My DOR and add city endorsements as needed. 2) Taxes: B&O tax, Retail Sales Tax, and major 2025 statutory changes (ESSB 5814) - Washington’s Business & Occupation (B&O) tax applies broadly to gross receipts; register with DOR and determine your activity classification and filing frequency. - ESSB 5814 (2025 law) significantly broadened the retail sales tax and retailing B&O tax to include many services commonly used by content monetization businesses (notably advertising services, custom website development, certain IT and data services, custom software and more) effective Oct. 1, 2025. Advertising services are expressly included (digital and nondigital activities tied to creation, placement, campaign planning, lead generation, acquisition of ad space, and related activities). - The Department of Revenue published an ESSB 5814 “Services newly subject to retail sales tax” page listing services newly taxable and links to interim guidance for categories (advertising services, custom website development, live presentations, temporary staffing, investigation/security, custom software, etc.). - Sourcing rules for advertising services are important: when dissemination/distribution locations are known, sales are sourced to where the ad is or will be distributed; when distribution isn’t known (pre-dissemination creative work), sourcing may default to purchaser’s location. For multi-jurisdictional campaigns, the state allows reasonable, documented allocation between jurisdictions if agreed to by seller and purchaser. - Interim guidance addresses existing contracts entered into prior to Oct. 1, 2025: sellers with unaltered contracts in place prior to Oct. 1, 2025 that were not taxable before that date generally are not required to collect sales tax on those agreements until April 1, 2026, provided there’s no “material change or amendment” to the contract. - Practical action: review and update pricing, invoices, and contracts to account for sales tax where applicable; agree and document sourcing/allocation methods in contracts for multi-state campaigns; start collecting sales tax where required; consult DOR rulings for edge cases. 3) Digital products, subscriptions and platform services - DOR provides guidance on digital products and digital goods; some digital goods and automated services historically were excluded or treated specially but ESSB 5814 removed some exclusions and expanded taxable service categories. Sellers of digital subscriptions, ad placements, and monetization services should confirm taxability with DOR guidance and consider sourcing of digital ad delivery (IP/geolocation evidence may be used per DOR examples). - Practical action: map revenue streams (ad sales, affiliate commissions, subscriptions, paywalls, tipping, virtual goods) to DOR tax categories; if taxable, register to collect sales tax, and ensure bookkeeping separates taxable vs nontaxable receipts. 4) Labor, contractors, and workers’ compensation (L&I) - Washington presumes most workers are “covered workers” for workers’ compensation unless they meet narrow independent contractor tests. A federal 1099 is not determinative for WA workers’ comp coverage. - L&I has tests and guidance; businesses must document why a person qualifies as exempt independent contractor. If you hire employees or covered workers, you’ll be registered for workers’ compensation through your business license application; failure to cover required workers can result in assessments, penalties, and interest. - Practical action: if using outside creators as contractors, perform and document the independent-contractor tests, consider contractor registrations when applicable, and consider optional workers’ compensation coverage for owners. Consult L&I and tax counsel for classification-sensitive arrangements (influencers, recurring creator arrangements, platform gig workers). 5) Privacy and consumer health data (My Health My Data Act / RCW 19.373) - Washington’s My Health My Data Act (Chapter 19.373 RCW) protects consumer health data not covered by HIPAA. It requires regulated entities to publish a consumer health data privacy policy prominently on their homepage, obtain valid authorizations to sell consumer health data, implement data security practices, and comply with geofence restrictions regarding health-care locations. - Enforcement: violations are a per se violation of the Washington Consumer Protection Act (RCW 19.86) and can be enforced by the Attorney General and via private action. Effective dates vary by section: some obligations began July 23, 2023; regulated entities (not small businesses) had to comply with certain sections by March 31, 2024, and small businesses by June 30, 2024. - Practical action: if your platform or service collects, processes, or infers health-related data (including wellness, fitness, reproductive, biometric inferences), publish a clear consumer health data policy, implement consent/authorization flows, review geofencing practices, and limit sharing/sale of consumer health data. 6) Consumer protection, advertising & disclosure - Washington enforces consumer protection laws through the Attorney General (Consumer Protection Division). While influencer advertising disclosure is primarily governed at the federal level by the FTC, Washington’s Consumer Protection Act can be invoked where deceptive or unfair practices occur. Platforms and creators should ensure truthful advertising and proper disclosures for sponsored content. - Practical action: follow FTC Endorsement Guides for clear disclosures (e.g., #ad, #sponsored prominently), retain records of sponsorships, and ensure marketing copy is accurate to avoid state-level CPA risk. 7) Promotions, contests, sweepstakes - Promotional rules (lottery, sweepstakes, skill contests) can implicate state laws; the Business Licensing Service asks whether you will sell lottery tickets and certain state endorsements may be required. If you run contests for monetization or promotional campaigns, consult legal counsel to ensure compliance with Washington rules about consideration, prizes, and registration (if applicable). 8) Practical compliance checklist (high-level, actionable steps) - Form & register: form LLC (if desired) with SOS; obtain FEIN; register for state business license/UBI via My DOR and add city licenses where needed. - Tax accounts: register with DOR for B&O and sales tax; classify activities under B&O; determine which services and goods are taxable post-ESSB 5814; set up bookkeeping to separate taxable revenues. - Contracts & invoices: update contract language on sourcing/allocation, tax responsibility, and invoicing; document any allocation agreements for multi-state ad campaigns. - Start collecting: begin charging retail sales tax where required; notify customers of tax changes; use DOR sales tax tools to find rates. - Workers & contractors: evaluate worker classification with L&I tests; obtain coverage for employees/covered workers; document contractor status; consider optional coverage for owners. - Privacy & data: if handling consumer health data, comply with RCW 19.373: post policy, obtain consent, implement data security, restrict geofence practices. - Advertising/disclosures: adopt clear influencer/sponsored-content disclosures and recordkeeping to limit CPA exposure. - Seek rulings/advice: when in doubt, submit a ruling request to DOR (Rulings@dor.wa.gov), consult L&I for coverage questions, and retain counsel for privacy and promotions law. Sources and verbatim excerpts used to compile this guidance (full citations and excerpts): 1) Washington Department of Revenue — Services newly subject to retail sales tax (ESSB 5814) Citation: https://dor.wa.gov/taxes-rates/retail-sales-tax/services-newly-subject-retail-sales-tax Excerpts: - "As of Oct. 1, 2025, a new law (ESSB 5814) requires that certain services now be taxed when sold." - "Among other things, ESSB 5814 makes sales of various services a 'retail sale' subject to Washington’s retailing business and occupation (B&O) tax and retail sales tax, including: Information technology services; Custom website development services; Investigation, security, and armored car services; Temporary staffing services; Live presentations; Advertising services; Sales of custom software and the customization of prewritten software." - "What you should do if your services are now subject to sales tax: Visit our sales tax tools resources page ... Let your customers know that sales tax is now required for certain services. If you have existing contracts or service agreements, check whether the new tax rules apply. Start adding sales tax to your invoices as applicable. Report and submit sales tax when you file your taxes. If you are unsure how the rules apply to your specific case, you can submit questions to Rulings@dor.wa.gov." 2) Washington Department of Revenue — Interim guidance regarding contracts existing prior to Oct. 1, 2025 (ESSB 5814) Citation: https://dor.wa.gov/laws-rules/interim-guidance-statement-regarding-contracts-existing-prior-october-1-2025-and-changes-made-essb Excerpts: - "The purpose of this interim guidance statement is to explain the tax collection and reporting requirements for taxpayers with existing contracts that were entered into prior to the October 1, 2025 effective date of ESSB 5814." - "Sellers with contracts in place prior to October 1, 2025, are not required to collect sales tax on those agreements until April 1, 2026, provided there is no 'material change or amendment' to the contract." - "The department will continue to review this issue for purposes of developing final guidance. This interim statement will remain in effect until the department issues its final guidance, cancels the interim statement, or new legislation is enacted." 3) Washington Department of Revenue — Digital products (digital goods) guidance Citation: https://dor.wa.gov/taxes-rates/sales-tax/digital-products-including-digital-goods Excerpts: - (From the DOR digital products guidance page) — DOR provides background on how digital products and digital automated services are treated and notes that exclusions were modified by ESSB 5814; sellers should consult DOR resources to determine taxability and sourcing rules for digital goods and services. 4) Washington Business Licensing Service — Apply for a new business license (My DOR guidance) Citation: https://dor.wa.gov/manage-business/my-dor-help/renew-or-update-business-license/apply-new-business-license Excerpts: - "Enter the Federal Employer Identification number (FEIN) for the business if you have it. You will need a (FEIN) to withhold taxes for any employees." - "For many cities in Washington State, you can apply for a city license as part of state business license application. If the city license where your business is located is not available through our application, you will need to follow-up with them directly." - "Hiring employees: By completing this Business License application, you will be registered for workers’ compensation at the Department of Labor & Industries and unemployment insurance at the Employment Security Department." 5) Washington Secretary of State — Start a Domestic (WA) LLC online Citation: https://www.sos.wa.gov/corporations-charities/business-entities/online-filing-instructions/start-domestic-wa-limited-liability-company-llc-online Excerpts: - "Start a Domestic (WA) Limited Liability Company (LLC) Online instructions and steps for filing Certificate of Formation, fee payment, and receiving confirmations; the SOS must be filed before completing certain Business License Applications for corporations/LLCs." 6) Washington Attorney General — Protecting Washingtonians’ Personal Health Data and Privacy (My Health My Data Act guidance) Citation: https://www.atg.wa.gov/protecting-washingtonians-personal-health-data-and-privacy Excerpts: - "The Washington My Health My Data Act (HB 1155) passed the Washington State Legislature ... The My Health My Data Act is the first privacy-focused law in the country to protect personal health data that falls outside the ambit of the Health Insurance Portability and Accountability Act, or HIPAA." - "The My Health My Data Act includes effective dates on a section-by-section basis. All persons, as defined in the Act, must comply with section 10 beginning July 23, 2023. Regulated entities that are not small businesses must comply with sections 4 through 9 beginning March 31, 2024. Small businesses ... must comply ... beginning June 30, 2024." - "Section 4(1)(b) of the My Health My Data Act explicitly provides that '[a] regulated entity and a small business shall prominently publish a link to its consumer health data privacy policy on its homepage.'" 7) RCW Chapter 19.373 (Washington My Health My Data Act — statutory text) Citation: https://app.leg.wa.gov/RCW/default.aspx?cite=19.373&full=true Excerpts: - "Chapter 19.373 RCW — WASHINGTON MY HEALTH MY DATA ACT (statutory sections enumerated). The chapter defines consumer health data, regulated entities, consumer rights (including deletion), geofence restrictions, and enforcement mechanisms, and cross-references the Consumer Protection Act (RCW 19.86)." 8) Washington Department of Labor & Industries (L&I) — Independent Contractors and workers’ compensation guidance Citation: https://lni.wa.gov/insurance/insurance-requirements/independent-contractors/ Excerpts: - "All workers in Washington are entitled to workers’ compensation unless they fit strict exemption definitions. ... Is a 1099 form enough? No. A 1099 form is a federal form and has no bearing on Washington state workers’ compensation coverage." - "Independent contractors who aren’t covered for workers’ compensation: Carefully review the tests outlined in the next two tabs. Document how each contractor passes each part of each test. Having a UBI number or contractor registration number does not automatically make a worker an exempt independent contractor."