business backgrounder | taxation
a rushed rollout
SB 5814 was introduced and passed in the final weeks of the 2025 legislative session as lawmakers finalized the budget. AWB, along with many others, warned the rushed timeline would lead to unintended consequences.
“ There are many administrative, legal, and policy ramifications that were not fully considered,” the Washington Research Council wrote.
The new law also did not go through a formal rulemaking process before it took effect in October. Instead, businesses had to rely on interim guidance released by the Department of Revenue over the summer.
Stone said the guidance specific to temporary staffing came out just two weeks before her business had to begin collecting the new tax.“ It felt very rushed and it felt very confusing,” she said. More than 500 people attended an AWB-hosted webinar in November where Department of Revenue staff walked through the law and answered questions; more than 120 questions were submitted in the live chat.
The tax change has created a new administrative burden on businesses.
“ The amount of time that I’ ve spent trying both trying to learn, trying to educate, trying to implement it has taken away a good portion of my time over the last five to six months,” said Rubino.
‘ fewer opportunities for businesses to grow’
Stone said she wishes lawmakers understood the role staffing agencies play in keeping people working and helping small businesses grow.
“ We bridge gaps during economic uncertainty, but adding retail sales tax to staffing services increases costs for employers and can reduce access to work rather than expand it,” she said.
“ It felt very rushed and it felt very confusing.”
— Ashley Stone, managing partner at Express Employment Professionals
She said a key issue is that the tax applies to the firm’ s full bill rate. A 10 % sales tax adds $ 120 per employee at 40 hours a week— costs that quickly add up for seasonal employers with lots of temporary employees.
“ You increase the cost of something and it’ s going to limit opportunities,” she said.“ Fewer entry points, fewer chances for people to get their foot in the door. Fewer opportunities for businesses to grow without bringing on a full-time staff member.”
After the law passed the Legislature, Rubino organized a group of ad agencies in the region to share information.“ It didn’ t make a difference whether they were our competitors,” he said.“ We are all impacted by this.”
During AWB’ s Legislative Day & Hill Climb in January, Rubino shared his concerns with Senate Majority Leader Jamie Pedersen, D-Seattle. As a small business owner in Pedersen’ s district, he wanted to share the law’ s real-world impacts. Beyond the administrative complexity, he said, the tax is hitting smaller clients who“ just can’ t afford to give up nearly 11 % of their budget.”
As complicated and time-consuming as the new law has been, Rubino said he remains optimistic.“ We’ re going to figure it out with whatever budgets our clients have – we always strive to meet clients where they are and get creative with the resources available.”
44 association of washington business