Washington State has decided that online advertising is officially a retail product. Yup, you heard that right: starting October 1, 2025, thanks to Senate Bill 5814, if your billing address is in Washington, you’re about to pay sales tax on your Amazon Ads. Because nothing screams “progress” like taxing pixels.
What’s Happening?
- Who’s affected: Any Amazon Ads customer with a Washington billing address.
- What’s taxed: Literally all Amazon Ads products — Sponsored Products, Sponsored Brands, Sponsored Display, DSP… if it shows up as an ad on Amazon, it’s taxable.
- When it kicks in: October 1, 2025. (Mark your calendars and grab some Tylenol.)
- Where it shows up: As a new, shiny line item on your PDF invoice. Because that’s exactly what advertisers needed — another line item.
Why It’s Absurd
Let’s call this what it is: a money grab disguised as modernization. Advertising isn’t a retail good. You’re not buying a sofa, a blender, or a lawn flamingo — you’re renting attention. Washington decided to lump it in with taxable retail sales anyway.
Think about it: You’ll now pay sales tax on your attempt to make sales. A tax on the thing you do to generate the taxable activity that already funds the state. It’s taxation inception.
How Washington Will Calculate It
Amazon, of course, will handle the math for you — because no one asked for more headaches on this front. The tax rate depends on:
- The address tied to your billing profile (Manager Account level or Advertiser Account level).
- The local jurisdiction rates.
- The final sale price of the advertising service.
Translation: if you’re in Seattle, you’ll probably pay more than your buddy in Spokane.
Any Way Out?
Yes — but only if you’re one of the magical few who qualify for tax exemption certificates, such as:
- Reseller Certificates: Agencies reselling Amazon Ads to clients.
- Multiple Points of Use (MPU): Ads used across multiple jurisdictions (because nothing says efficiency like a government tax loophole).
But don’t relax just yet. You’ll need to:
- Submit your certificate in Amazon’s Exemption Portal (login required, obviously).
- Keep it updated, or risk your exemption expiring and watching sales tax magically reappear on your invoice.
For sellers, Amazon tucked the exemption process inside Seller Central (buried under about five layers of links, of course).
What This Means for Advertisers
- Costs go up: Every Washington-based advertiser’s ROAS just got an automatic haircut.
- Agencies get complicated: If you’re reselling ads, you’ll need to stay on top of exemption paperwork, or you’ll be eating margin.
- Budget creep: That $100k/month ad budget? It’ll be $100k plus tax. (Imagine explaining that to your CFO who already thinks Amazon Ads are “expensive.”)
The Punchline
Washington just decided to tax ads about buying things, because taxing the actual things apparently wasn’t enough.
So here’s your new Amazon Ads math if you’re in Washington:
Ad Spend → Sales Tax → More Expensive Clicks → Lower Margins → State gets paid before you do.
And if you were wondering, yes — other states will be watching.
So, advertisers, prepare your wallets. Washington’s not just taxing your products anymore. They’re taxing your ability to sell them.
