The following is information that we are repeating because of the potential taxation implications on Vet Med. The Washington Department of Revenue has now provided guidance for all of the new taxes (repeated original story is copied below).  The guidance documents from DOR can be accessed here.

Repeated story

WSVMA has been advised that several new taxes included in Washington State’s 2025/26 budget will impact the veterinary profession. These changes begin taking effect October 1, 2025.

In 2025, the legislature enacted changes impacting both the Business & Occupation (B&O) tax and the sales tax. Specifically, the B&O tax rate on services was increased, and the scope of the sales tax was broadened to include additional service categories.

B&O Tax -The legislature increased the B&O tax on Services and Other Activities (veterinarians fall under the services B&O tax category) from 1.75% to 2.1% for businesses with a gross income of over $5 million.  Businesses with gross income below $5 million remain at the current rates.

Sales Tax on Services -The 2025 legislation imposes the sales tax on temporary staffing services, such as relief veterinarians. Additionally, contracted services such as IT support, live presentations and custom website development services are also now subject to the sales tax.

This legislation was introduced and passed quickly by the legislature.  There are still many unanswered questions on how the legislation will be implemented.  Also, the 2026 legislature may consider revisions to the legislation.

WSVMA’s taxation advisers have recommended that practices begin paying the new taxes now, with the understanding that relief or clarification may come later.

The following is a link to the Washington State Department of Revenue – 2025/26 Budget Tax Changes website.

WSVMA’s Position

• We strongly recommend that all practices seek professional accounting/tax advice to understand how these changes will affect your business.
• WSVMA is actively working with our lobbyist to clarify and, if possible, secure carve-outs for veterinary medicine. However, we do not anticipate an immediate resolution.

We will keep you updated as we receive additional guidance.