Washington State Clarifies Tax Rules for Live Online Classes: What You Need to Know

Washington State has provided guidance on the taxability of live online classes, effective from February 7, 2024.
Classes that offer real-time interaction between presenters and participants are subject to Washington’s business and occupation (B&O) tax under the service and other activities classification. They are not subject to the retail sales tax.
Online classes without real-time interaction, such as prerecorded classes or those limited to chat rooms, are subject to both retail B&O tax and retail sales tax. This distinction determines the tax treatment for sales tax purposes.