Washington State Digital Ad Tax Set for Changes, Court Challenge

Washington state lawmakers expect to make changes to a new law applying sales tax to digital advertising even as they prepare for lawsuits seeking to strike it down.

The sales tax expansion is part of a $9 billion package of tax increases Gov. Bob Ferguson (D) signed last week to help close a $16 billion budget shortfall. He said the bill with the advertising tax (S.B. 5814) is one he expects to adjust when lawmakers convene again in 2026. But with an effective date of Oct. 1, 2025, it could be the target of litigation before then.