Guidance on Temporary Staffing Sales Tax Issued

Washington’s operating budget was fueled by several tax measures adopted by the Legislature in 2025. A tax on temporary staffing services took effect on October 1. Under ESSB 5814, providers of “temporary staffing services” must report gross income under the retailing B&O tax classification and are further required to collect and remit retail sales tax on temporary staffing services.

Skilled Nursing and Assisted Living providers utilizing temporary staffing services should expect to see a sales tax charge on staffing agency invoices.

Here is the interim guidance that defines temporary staffing services, including temporary nursing pool or agency staff. The guidance also clarifies that direct hires (temporary or permanent), independent contractors, and outsourcing to third-party independent contractors are not considered temporary staffing services and thus are not subject to the tax.

Please reach out to Lauri St. Ours at WHCA if you have questions about the policy or concerns regarding the increase in agency staffing service costs due to the new tax. WHCA is particularly interested in hearing from Assisted Living providers utilizing agency staffing services.