In Washington State, not all service businesses are subject to sales tax, as the state distinguishes between retail services and professional services. Here's a breakdown:

Service Businesses Subject to Sales Tax

Retail services are taxable and include:

• Construction and repair services: Includes work on buildings, roads, and other infrastructure.
• Landscaping and lawn maintenance: Services like mowing, pruning, and garden installations.
• Physical fitness services: Gyms, yoga studios, and other fitness-related services.
• Personal care services: Haircuts, tanning, nail salons, and similar services.
• Cleaning services: Janitorial services for real property (e.g., homes, offices).
• Repair and maintenance of tangible personal property: Such as fixing vehicles, appliances, or electronics.

Service Businesses Exempt from Sales Tax

Professional and other service businesses typically not subject to sales tax include:

• Consulting services
• Legal, accounting, and financial services
• Healthcare services
• Education and training services: *if your business delivers curriculum online, you may be subject to sales tax. Learn more here.
• Creative and IT services: Web design, graphic design, and software development.

Important Notes

Businesses offering a mix of taxable and non-taxable services must ensure proper classification and reporting. Additionally, even if a service is not subject to sales tax, it is still subject to the Business & Occupation (B&O) tax, which is a gross receipts tax applied to all businesses in Washington. For specific scenarios or further clarification, consult the Washington State Department of Revenue.

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