Washington issued interim guidance on sales tax for temporary staffing services on September 17, 2025. Effective October 1, 2025, temporary staffing services are treated as retail sales, making them subject to retail sales tax and retail business and occupation (B&O) tax. Previously, taxation followed the worker’s underlying activity.
Temporary staffing services are defined as recruiting, hiring, and assigning workers under the customer’s direction with the intent to reassign them. An exclusion for placements to licensed hospitals is highlighted in the guidance. Work performed at hospitals, which is otherwise a retail service (landscaping, for example), remains taxable. Direct hiring, even if temporary, is not taxable. If a temporary worker provides their services remotely, the services are received at the purchaser’s staff location, which is considered the sourcing of the sale for tax calculation.
The guidance also confirms that nonprofits generally pay retail sales tax just like other purchasers. The interim guidance will remain in effect until permanent guidance is issued.
For more details, visit the Washington Department of Revenue Website. (Interim Guidance Statement Regarding Changes Made by ESB 5814 For Temporary Staffing Services, Washington Department of Revenue, September 17, 2025)