DOR Posts FAQ About DAS Professional Services, Confirms Majority of CPA Services Should Not Be Subject to Retail Sales Tax
July 22, 2025
by Mike Nelson
On July 22, the Washington State Department of Revenue (DOR) posted a FAQ about the implementation of Engrossed Substitute Senate Bill (ESSB) 5814. The DOR issues general guidance via FAQs before interim guidance, Excise Tax Advisories, or rulemaking can be issued. The FAQ has confirmed that the vast majority of CPA services and CPA firms should NOT be subject to retail sales tax.
The first, and currently only, statement in the FAQs says that in general accountants are not subject to retail sales tax because of changes to the digitally automated services (DAS) changes in ESSB 5814.
This is great news for accountants and other professional services. The reasoning provided is that professional services have previously been considered an “other services classification” under the B&O tax, and technology used in the performance of those services is already subject to retail sales and use tax.
An important note at the bottom of this guidance states that the FAQ is “not intended to cover every situation” and that actual tax treatment may vary depending on each situation’s facts and circumstances. The DOR uses this example: “… if a service provider offers a portal where their customer can choose from various do-it-yourself templates and merely have the results reviewed by the service provider, they could be considered a DAS.”
Full interim guidance, still being drafted by DOR, will hopefully add clarity around defining when an engagement moves from a traditional professional service to a DAS. In the meantime, the vast majority of CPA services and CPA firms should NOT be subject to retail sales tax.
We will continue to monitor and engage in the rulemaking process and look to codify into law during the next legislative session a clear exemption for professional services from retail sales tax.
Mike Nelson is WSCPA Manager of Government Affairs. You can contact Mike via email.