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Lacey staff to update B&O model ordinance after state expands taxable services; council warned of a short transition period
Summary
City staff briefed council on required changes to the local business-and-occupation model ordinance following the 2025 state law (SB 5814) that reclassifies certain services as retail sales; staff will return Dec. 16 with a draft ordinance and definitions and warned businesses may face a temporary overlap of sales tax and B&O filings during the transition.
Acting Financial Services Manager Chelsea Knight told the council Dec. 9 that the state’s 2025 legislative changes (Senate Bill 5814) require cities to revise their Business & Occupation (B&O) model ordinances to reclassify specified services as retail sales effective Jan. 1, 2026.
Knight said the work group that drafted the model‑ordinance updates narrowed the scope of changes to what state law requires and that the city will present an ordinance for council adoption on Dec. 16. Affected…
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