Washington State Waives Penalties Under Digital Advertising Tax

Washington is temporarily waiving financial penalties for taxpayers struggling to comply with the state’s new tax on digital advertising and other technology services, acknowledging the transition has been “challenging for many businesses.”

Businesses with uncollected retail sales tax and unpaid use tax liabilities related to the 2025 law can apply for the 15-month penalty waiver, according to information Washington’s Department of Revenue posted on its website this week. Businesses would still owe the underlying taxes and any applicable interest during the relief period. Penalties for evasion, negligence, and tax avoidance aren’t covered under this program.

Despite broad outreach efforts before ...