Washington SB6113: What Gym Owners Need to Know About Staffing Tax

Most Washington gym and fitness studio owners haven't heard of SB6113, but a single provision in the bill could affect how they pay taxes on temporary staffing services starting October 1, 2025. Understanding what's covered—and what's not—matters for budgeting and compliance.

What Changed and When

Washington enacted a new retail sales tax on temporary staffing services, effective October 1, 2025, under ESSB 5814. SB6113, signed into law this year, clarifies which staffing arrangements fall outside that tax. The clarification in SB6113 (Section 2, pages 6–7) applies both retroactively and prospectively to October 1, 2025.

The key point: not all temporary staffing is taxed the same way.

Who Is Exempt

Under SB6113's clarification, the new retail sales tax on temporary staffing services does not apply to:

• Hospital staffing services — if your gym contracts with a staffing firm primarily for hospital placements, that arrangement is excluded
• Paymaster services — administrative payroll processing by third parties falls outside the tax
• Independent contractors — workers classified as independent contractors, rather than temporary employees, are not subject to the tax

For fitness studios, this matters most if you use staffing agencies or contractors for instructors, trainers, or front-desk coverage. If your arrangement fits one of these categories, you won't owe the new retail sales tax on those transactions.

What This Means for Your Business

If you currently hire temporary staff through an agency or use independent contractors, the exemptions in SB6113 directly reduce your tax liability. You won't pay the retail sales tax on those staffing costs—which lowers your effective expense.

Conversely, if you use a staffing agency for temporary employees who don't fall into the exempt categories, you will owe the tax starting October 1, 2025. That's a new cost to factor into your budget.

The distinction matters for planning. If you're considering switching from temporary staff to independent contractors, or if you're evaluating staffing agencies, the tax treatment is now one more variable in your decision. Similarly, if you're a smaller staffing firm serving fitness studios, understanding which services are taxed helps you price accurately and communicate clearly with clients.

What You Should Do

Review your current staffing arrangements before October 1, 2025. Ask yourself:

• Do I use a staffing agency? If so, are those placements hospital staffing, paymaster services, or independent contractor arrangements?
• How will the new tax affect my labor costs if my current staffing doesn't qualify for an exemption?
• Should I adjust my staffing model to take advantage of the exemptions?

Your accountant or tax advisor can help you classify your current arrangements and estimate the impact. The Washington Department of Revenue will provide additional guidance as the October 1 effective date approaches.

Source: SB6113, Section 2 (pages 6–7) and Section 27 (page 77); effective October 1, 2025.