First Lawsuit Filed Against Pending Washington State Tax
It's easy to get lost in the current taxation climate in Washington State. Of the dozen or so taxes passed during the 2025 legislative session that have either gone into effect already (or will before the end of the year), one in particular was destined for the courtroom.
The majority party's never-ending quest for revenue inspired Senate Bill 5814 (SB 5814) which will now impose a sales tax upon digital property, products, and/or services when purchased in Washington State. It's a tax that has been circled by businesses large and small since it was introduced in the middle of April.
Tech companies, advertising firms, and most other entities that would be impacted negatively by the bill spoke out against it. Microsoft CEO Brad Smith went on the record over the impact the bill would have if passed and signed by the Governor.
The pleas also served as a warning that litigation would most likely follow if the bill became law. That threat hasn't seemed to bother the majority party as the State has faced its share of lawsuits. The first suit has been filed against SB 5814 in Thurston County Superior Court, but not by Microsoft or Google, but by one of the Country's biggest media companies.
The Peacock has Landed In Washington State
Comcast, the parent company of NBC, Universal, and Peacock (among many others) is taking the state, and the WA Department of Revenue, to court over the new law. Their filing alleges Washington State's law violates federal law, specifically the Internet Tax Freedom Act which prohibits states from discriminatorily taxing electronic commerce.
Comcast explains their position as such:
Almost all forms of advertising conducted over the internet are subject to the tax, while most forms of advertising conducted off the internet are not subject to the tax...
The media giant goes on to claim the law is unconstitutional and should be struck down for that reason. What makes it more interesting is that newspapers, radio, and TV are exempt. That means those entities will not have to impose or collect the sales tax while other digital media entities (like streaming services) would. The law is set to take effect October 1st.