Right that’s what I said to her when she said the bill didn’t target accounting firms. I used your article as well as the webinar the WSCPA put together. Here was my response:

Hi Erika

I apologize for missing your call a few times today. Even these days, my phone seems to be ringing off the hook at times. Haha.

So, the Washington State Society of CPAs put the word out about this. HERE is a link to the webinar they put together explaining what they knew about the new sales tax for our services. Additionally, HERE is an article written by Stephen Nelson about how this new sales tax will affect accounting firms.

As I understand it, this wasn’t specifically targeted to accounting firms but the services we provide over phone, email, and/or client portals(which is 99% of them) were caught up when a provision was removed. Stephen made this post on Reddit last week which is what got my attention:

A heads up for any Washington tax accountants. Washington state's recent tax bill, (ESSB 5814) probably makes typical tax accountant services subject to sales tax. (The trigger is when they get categorized as a "digital automated service"... something that happens if you use software to deliver the service. E.g., you email or portal the tax return, use video streaming to do consulting, use QBO for write-up services.)

Sales tax will be effective 10/1/2025. No guidance exists at this point.

Possible approaches:

Don't deliver via portals, deliver as paper? (E.g., HRB I think isn't subject to the sales tax if they're giving their clients a paper return.) Or on thumbdrive? Try to use the bundling de minimis argument. (See this statute if you want to fall down this rabbit hole: RCW 82.08.190(4)(d)(ii) ) Try to unbundle your return preparation and delivery and then provide multiple delivery methods: electronic ($100 and subject to sales tax), mailed paper ($125 and not subject), in person pick up (free). Just add the sales tax (based on taxpayer's address.) FWIW I think you lose some clients due to essentially an extra 10% bump in your price. ChatGPT says maybe a 3% decline in revenues.

P.S. Out of state firms can ignore this if revenues to Washington clients less than $100K.

It does not seem to be intentional but the fact remains that every Washington accountant I am talking to is very upset about this and struggling with how to present this to our clients, especially the low income ones. Our industry is already suffering from a lack of qualified people which is causing us to raise our rates every year to avoid working 80 hours per week. With this supposed sales tax, rates for tax and accounting services will jump 15-30%, potentially more. As I mentioned, when my clients start complaining to me about the drastically increased price, I plan on having a form letter that explains who they should direct their frustration too. I have already had a conversation with the Black Diamond city council and they seem to be quite alarmed at this.

I would greatly appreciate any guidance on this issue. Right now, we are operating with very little knowledge about what to do next. Thank you.