Comcast lawsuit argues new Washington tax on advertising is illegal

Comcast has initiated legal action against a new Washington law that imposes a sales tax on advertising services, asserting it violates federal law by creating disparities between online and offline advertising taxation. The law, which is scheduled to take effect on October 1, 2025, is projected to raise approximately $1. 1 billion over the next two years, but if overturned, could lead to a $475 million shortfall in tax collections. The lawsuit specifically challenges provisions that exempt traditional advertising mediums while imposing taxes on digital platforms like streaming services. This legal dispute has drawn attention from a coalition of streaming services, which warned that the tax could result in higher consumer costs or reduced service options.

The Washington Department of Revenue is currently reviewing the lawsuit and is in the process of developing implementation guidance. Local business owners have voiced their concerns regarding the legality of the tax and its potential negative impact on consumers during listening sessions held by the department. The tax law is part of a broader budget strategy aimed at addressing a $9. 4 billion deficit. The outcome of this lawsuit could significantly affect the state's financial landscape and the advertising market.