TAXING GROWTH: WHAT ESSB 5814 MEANS FOR WASHINGTON POTATO GROWERS

Come October 1, 2025, potato growers will start paying more for essential services — and not because costs are going up, but because the Washington State Legislature has expanded the definition of retail sales under Engrossed Substitute Senate Bill (ESSB) 5814. For years, farmers have relied on specialized services like advertising, IT support, and custom software development to keep operations modern and competitive. Now, many of those services will be potentially subject to retail sales tax.  

SERVICES THAT COULD BE TAXED AT STANDARD RETAIL TAX RATES:

• Information technology services – including network support, data storage, and cybersecurity.
• Custom website development – a vital tool for branding, direct-to-consumer sales, and traceability.
• Investigation and security services – which we use for property monitoring and theft prevention.
• Temporary staffing services – a seasonal necessity during planting and harvest.
• Advertising services – from digital campaigns to ag publication placements.
• Live presentations – including trade shows and educational seminars.
• Custom software and prewritten software customization – such as crop tracking, accounting, or logistics platforms.

For growers already stretched thin by rising labor, fuel, and compliance costs, this tax expansion is yet another burden. It discourages innovation and modernization at a time when agriculture is expected to become more efficient and transparent. For example, custom software that helps track field conditions and schedule irrigation more precisely is no longer just a capital investment — it’s now also a taxable purchase. That changes the math when considering upgrades that would improve water use, pest monitoring or yield.

The Department of Revenue is working to clarify the scope of this law. They’ve pledged to issue Special Notices, FAQs, and Excise Tax Advisories. The State is less four months out from implementation, and guidance is still limited. If you have questions please submit those to This email address is being protected from spambots. You need JavaScript enabled to view it..  DOR will also host opportunities to participate in stakeholder meetings. Those will be published as they are scheduled.

Services newly subject to retail sales tax | Washington Department of Revenue