Will Washington’s New Payment Processor Tax Mess With Your Glitter Budget?
Hey beauty pros — if you run a salon, rent a booth, or swipe cards for services in Washington, there’s a new tax law coming your way that’s worth knowing about. It won’t hit you directly, but it might sneak onto your bill anyway.
In May 2025, Washington passed Substitute House Bill 2020, which raises the Business & Occupation (B&O) tax on companies that process credit and debit card payments — think Square, Stripe, Vagaro, and all the big guys behind the scenes. This kicks in January 1, 2026, and while it's meant for them, you might end up footing part of the bill.
What’s the Deal?
Here’s what’s happening:
Payment processors will now pay a higher B&O tax rate (3.1%) on the money they make.
They do get to deduct fees they pass along (like interchange and network fees), but the tax hike still stings.
Sooo... Will This Hit My Salon?
Let’s keep it real: probably yes.
Even though this tax is meant for the techy giants, they’re not just going to eat the cost. You might notice:
Slightly higher card processing fees
A new "Washington tax recovery fee" on your merchant statement
Subtle pricing changes from tools like Vagaro and Square starting in 2026
What Can I Do (Besides Cry Over My Cuticle Cream)?
Let’s be proactive, not panicked. Here’s how to prep:
Keep an eye on your merchant statements
Scan for any new charges or fees starting January 2026
Rethink your pricing
A small card processing fee or a friendly cash discount can help offset costs
Get creative with payment options
Some clients love bank transfers, Zelle, or ACH — especially if you make it easy
Keep your clients in the loop
A simple sign or note at checkout goes a long way. People appreciate transparency.
Our Two Cents
You didn’t ask for this law, but it’s on the books. And while it targets huge payment processors, the ripple effect might touch your salon’s bottom line. That’s where we come in.
At ClearPath Accounting, we’re already watching this unfold and planning ahead for our clients. We’ll help you navigate any sneaky new fees, update your pricing with confidence, and keep your beauty biz profitable.
Have questions? Want help breaking down your statements? We’re just an email away: info@cpateam.org
