Washington Governor Bob Ferguson signed SB 6346 on March 30, 2026, repealing sales tax on several services that became taxable in October 2025, including custom software, IT consulting, data processing, security services, and temporary staffing. The bill also raises small business B&O tax credits and doubles the B&O filing threshold to $250,000. All relief provisions take effect January 1, 2029, pending validation of WA’s new income tax in WA courts.

Additional bills make near-term changes: the data center refurbishment sales tax exemption ends July 1, 2026 (SB 6231), the B&O insurance exemption narrows retroactively to October 2019 (HB 2487), and new penny-rounding rules for in-person cash transactions take effect June 11, 2026 (HB 2334).

The bottom line: Businesses operating in Washington should review each bill's effective date and confirm how the service tax repeals, exemption eliminations, and B&O changes affect their specific tax obligations.

The Missouri House passed a bill that would phase out the state's individual income tax and replace that revenue with expanded sales taxes covering services and digital goods. The bill now moves to the Senate. If passed, Missouri voters would decide on a constitutional amendment giving the next General Assembly authority to implement the new sales taxes.

The bottom line: Income taxes account for about 60% of Missouri's general revenue. If this passes, businesses selling services or digital goods in Missouri should prepare for new sales tax obligations. The bill still needs Senate approval and a voter referendum before anything takes effect.

New Jersey introduced A4100, a bill that would impose a 5% assessment on gross receipts from video streaming entertainment services. The charge applies to streaming providers whose annual New Jersey gross receipts meet or exceed $250,000. The bill would require streaming entertainment providers to prepare an annual financial report detailing gross receipts from video streaming services. Cable service providers are excluded from this bill. The bill structures this obligation as a gross receipts tax rather than a traditional sales tax.

The bottom line: If you provide video streaming services to New Jersey customers and your annual in-state receipts reach $250,000, this assessment applies to your gross receipts from those covered services. Streaming providers should review their New Jersey revenue figures now and prepare compliance systems if this bill passes.

Washington's Department of Revenue launched a temporary International Remote Seller Voluntary Disclosure program running from February 1 to May 31, 2026. The program targets foreign-headquartered businesses that have established substantial nexus in Washington but have not registered or reported taxes. Qualifying businesses receive a reduced lookback period (four years plus the current year for B&O taxes, 12 months for uncollected retail sales tax) and up to 39% in penalty waivers. Participants must also register with the state by submitting a business license application. 

The bottom line: If your business makes remote sales into Washington, this program offers a limited window to come into compliance with reduced penalties and a shorter lookback period. Businesses discovered through the state's normal audit process face a seven-year lookback and full penalties of up to 39%.

Tennessee lawmakers introduced SB 2568, a bill that would expand the state's sales and use tax to cover advertising services purchased by or on behalf of businesses generating $100 million or more in annual revenue. The bill defines "advertising" broadly to include any written, electronic, or printed communication that promotes a brand, product, or service. That definition covers sponsorships, television, digital, radio, billboard, and print advertising. The bill has passed its second consideration and been referred to the Senate Finance, Ways, and Means Committee. If enacted, the tax would take effect January 1, 2027. 

The bottom line: Tennessee is following Washington's lead in targeting advertising services for sales & use tax base, but with a key distinction: the $100 million revenue threshold means this tax is aimed squarely at large businesses. Companies meeting that threshold should monitor SB 2568 closely and assess how a new tax on ad spending would affect their marketing budgets and vendor agreements in Tennessee.

The Virginia Legislature will consider several sales tax changes during its 2026 session; most notably, House Bill 900 would lower the state's retail sales and use tax from 4.3% to 4% while expanding the tax to cover digital personal property and digital services*. If passed, this bill would go into effect starting January 1, 2027 and the taxable digital products would include the following: digital codes**, digital subscription services***, software, digital audio and audiovisual products, and reading materials delivered electronically. Taxable digital services would include data storage, digital subscriptions, software applications, and website hosting and design. The bill would also add a new phrase – “digital personal property****” – to Virginia’s definition of tangible personal property. The bill is currently with the House and has not yet passed.

The bottom line: SaaS companies selling to Virginia businesses should monitor this bill closely. If passed, B2B digital services, digital subscription services, digital personal property, software applications, data storage, and website hosting would become taxable in January 2027, requiring updates to tax collection processes for Virginia customers.

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Terms

*Digital services refers to the following services: software application, computer-related, website hosting and design, data storage, and digital subscription.

**Digital codes means a code that permits an end user to obtain at a later date a digital subscription service, digital personal property, or both.

***Digital subscription services means a service, including audio and visual streaming services, that for a fee allows the end user to access and use software, reading materials, or other digital data or applications for a defined period of time, and which products the end user does not own or have permanent access to outside of such period of time.

****Digital personal property means property delivered electronically to an end user, including software, digital audio and audiovisual products, reading materials, and other data or applications, that the end user owns or has the ability to continually access, whether by downloading, streaming, or otherwise accessing the content, without having to pay an additional subscription or usage fee to the seller after paying the initial purchase price.