The Washington Department of Revenue (DOR) has announced that it is offering a temporary penalty relief program for taxpayers affected by the enactment of S.B 5814, which took effect October 1, 2025.
The DOR is offering a temporary program to waive certain penalties for businesses that voluntarily report and pay retail sales and use tax for services that became subject to retail sales tax under S.B. 5814. The program waives penalties for:
Note that the tax itself and any interest still need to be paid. Additionally, the evasion, negligence, and tax avoidance penalties are not eligible for relief via this program.
Taxpayers may qualify if they owe retail sales or use tax because of S.B. 5814 changes and submit an application for penalty relief by September 30, 2027.
For preexisting contracts with temporary sales tax relief, penalty relief starts when the contract no longer qualifies for temporary relief or on April 1, 2026, whichever comes first. Relief ends on December 31, 2026.
Requests for penalty relief must be submitted through the DOR’s Voluntary Disclosure Application, which can be found at the DOR’s website. When completing the application, the DOR notes that taxpayers should select Yes for the question, “Are you applying for penalty relief related to sales tax changes in ESSB 5814 (2025)?”
If a business is not registered, they should review the DOR’s Voluntary Disclosure Program information to see if they qualify.
If the DOR determines that a taxpayer qualifies for relief under the program, they will send an agreement for signature. The signed agreement must be returned within 30 days of the application. If the signed agreement is not received within 30 days, the application will not be approved.
Once the signed agreement is returned, the DOR will contact the taxpayer, determine the tax liability, send a draft assessment to the taxpayer, and post the final invoice in the taxpayer’s My DOR account. The taxpayer must then make full payment by the date listed on the invoice. If payment is late or incomplete, additional interest and late-payment penalties will apply.
For additional information, visit the DOR’s ESSB 5814 Penalty Relief Program webpage. This is a valuable opportunity for affected taxpayers, who should make note of the September 30, 2027 deadline for submitting an application. (ESSB 5814 Penalty Relief Program, Washington Department of Revenue, March 4, 2026)