Washington Business Checklist Download:
Download this useful checklist in PDF format to stay on track when starting your business in Washington.
Download NowHow to Start a Business in Washington:
Washington State does not have personal or corporate income tax, but does require business and occupation (B&O) tax, and retail sales/use tax. Depending on the city, businesses may also be required to pay local B&O tax and licensing. To do business in Washington, you will have to obtain a UBI (Unified Business Identifier) if you meet the requirements.
Follow our step-by-step guide to starting your business in Washington State.
Form your business.
Review Washington formation options.
Washington offers seven ways of forming your business, which we discuss below. Review these closely and pick the one that fits your business best.
Name your business.
Before you decide on a name for your business in Washington, you'll need to visit the Secretary of State's website and run a search to make sure your desired name is available.
Once you've established availability, download the name reservation form, fill it out, print it, and sign it. You'll need to mail this form to the Washington Secretary of State Corporations Division, along with a check for $30.00 or $20.00 if you're starting a nonprofit organization. To expedite the process, print EXPEDITE in bold lettering on the outside of the envelope and include an additional $50.00. Once filed, names are reserved for 180 days. There is currently no online filing option for businesses in Washington.
It's a good idea to do some industry research and look at the names of your competitors before choosing your business name. Analyze the existing names of similar businesses and look for patterns in how they are named, and try to find ways to distinguish your name and brand from theirs.
If you need help finding a business name, be sure to check out NameSnack's free business name generator.
Get an employer identification number (EIN).
Nearly all businesses will need to register for federal taxes by applying for an employer identification number.
Register your business in Washington.
In Washington, sole proprietorships and general partnerships do not need to file any formation documents, but to form a corporation or limited liability company you need to file a certificate of formation with the Washington Secretary of State. You may do this online or mail the documents along with a check to their physical location.
File online using the Washington Corporations and Charities Filing System.
Set up a Washington Corporations and Charities Filing System account.
At the bottom of the page, click on "Create a User Account."
Select "Free User Account" or "Commercial Registered Agent Listing Statement" and continue.
Provide your information and follow the prompts.
In the correct fields, provide a street address, phone number, and email address. Then, submit and confirm a password. Click "continue."
It costs around $280.00 to register a business in Washington, less if you do not expedite or if you're registering a nonprofit organization.
Obtain necessary permits and licenses.
Aside from a business license, you may need additional licenses and permits in order to operate. Contact the Washington Department of Licensing to search for your licenses by industry, or use the list of licenses to find what you're looking for.
Listed below are links to the required forms and licensing information for different professions:
- Travel Agents.
- Architects.
- Tattoo Artists.
- Car Dealers.
- Cigarette Retailers.
- Certified Counselors.
- Electrical Engineers.
- Escrow Agents.
Check the Washington State Department of Licensing to see if your business requires a license.
You can find a business license application on the Washington DOR website.
You will require a business license if you sell online in Washington.
Register your business for taxes.
Register with the Department of Revenue.
Once you have filed the necessary documents with the Washington Secretary of State, you'll have to file a Business License Application with the Department of Revenue.
Businesses will have to register for tax under the following circumstances:
- If the business needs city and state endorsements.
- You're conducting business under a name that's not your full legal name.
- You'll be hiring staff in the next 90 days.
- You have a gross income of more than $12,000 per annum.
- You have a business that is subject to additional taxes and fees.
- You buy or process specialty wood products.
Once your application is approved, you'll receive information regarding your tax returns, a Unified Business Identifier (UBI) that you will use when your file your taxes, and your business license which should be posted at each of your business locations.
If you're in the retail or service industry, find out more about retail sales tax and exemptions.
Go to the Department of Revenue Washington State.
Click on the activation email you'll receive and sign in.
Verify that you have a SecureAccess Washington (SAW) user ID. To do this, click "Log in," enter your email address, and validate the "I'm not a robot box." Follow the prompts until a green tick appears. Click on the "Find" button, and "OK." Check your email for a notification from MyDOR@dor.wa.gov that will remind you of your user ID or confirm that no ID was found.
Use your Letter ID received in your correspondence from Revenue to add access to your tax or business licensing account. To do this, log in with your SAW user ID and password. Once on the My DOR Services page, select "Access your account using a letter ID." If required to enter profile info, complete all fields and click "Save." If not, go to the ID Validation page, enter your Letter ID (included in correspondence form the Revenue Department), and click "Next." Now enter your UBI, Account ID, or Deferral Certificate number as required, review account info, and click "Submit." On the Confirmation page, hit "OK." Your account will now be added to the Accounts tab on the Business Licensing and Tax home page.
If there is no administrator linked to your online account, request that a Letter ID be sent to the address on file. If there is an administrator linked, contact them directly to request access.
Have a letter ID sent to you by logging in with your SAW user ID and password. From the My DOR Services page, click on "Get Started from your business licensing and Tax Home." Enter profile info if required, or go directly to the I want to menu, and hit "Access an Existing Business Account." Once on the ID Validation page, check the "Click here to request the Letter ID to be mailed to the address on file. Next, select the account type, enter the ID number, and hit "Next." Once on the Confirmation page, hit "Submit" to have the letter mailed to the address on file. When you click the "OK" button, you'll return to the Business Licensing and Tax home page.
Determine your B&O tax rate.
Washington does not pay income tax, but B&O taxes are calculated on gross income. Your B&O tax rate is determined by your industry.
Find out if you need to pay local B&O taxes.
Check if you need to do excise tax returns.
Excise taxes are additional taxes applicable to certain industries/sectors. If these taxes are applicable to you, you can find the forms online or use e-filing.
Pay property tax.
A county assessor will complete a property appraisal before you start paying property tax to your county treasurer. To find out more about property tax and valuation, get in touch with local county officials.
Hire employees and report them to the state.
Use Secure Access Washington (SAW) to report new employees.
Employers are required to report all newly hired and rehired (have not worked for you for a minimum of 60 consecutive days) workers within the State of Washington. If this is your first time reporting, only report workers hired since your last quarterly report to the Employment Security Department.
You can report new hires online, or via telephone, fax, and mail. Using the DCSOnline platform is the preferred reporting method.
To report new hires, you'll need to set up a DCSOnline account.
Once your account is set up, use this step-by-step guide to report new hires.
Employee information needed when reporting new hires: name, address, social security number (SSN), date of birth, and date of hire.
Employer information needed when reporting new hires: business name, business address, and federal employer ID number (FEIN) or employer identification number (EIN).
Fill out this form when reporting by fax or mail. You can also use the form as a guide when reporting via telephone.
Obtain Workers' Compensation Insurance.
Every employee in Washington, including part-time workers, is required to have workers' compensation insurance. An insurance pool known as the Washington State Fund is used to obtain this type of insurance.
You can apply for workers' compensation by filing a business license application with the Department of Revenue or updating your existing business details.
Once you have submitted your business license application, an account manager will contact you to confirm some details and thereafter set up your workers' compensation policy. You will receive a letter explaining your account, rate notice and certificate of coverage, and any workplace posters you'll need to display.
Display mandatory posters in your place of business.
The Washington State Department of Labor and Industries mandates that all employers display three posters in their business to inform employees of their rights and responsibilities.
The following notices need to be displayed at your worksites:
- Notice to Employees - If a Job Injury Occurs (F242-191-909) (State fund).
- Notice to Employees - If a Job Injury Occurs (F207-037-909) (Self-insured).
- Job Safety and Health Law (F416-081-909).
- Your Rights as a Worker (F700-074-909).
You don't need to order new posters each year. Just compare the valid date(s) with the date printed at the bottom of your poster, just right of the publication number.
Washington Business Types:
1. Sole Proprietorship:
Sole Proprietorships are simple to operate and offer greater control and flexibility than other business entities. Businesses with this structure are typically owned by individuals or married couples. All liabilities fall to the owner(s). In Washington, you do not need to file legal documents with the Secretary of State to register as a sole proprietor.
2. General Partnership:
Comprised of two or more owners — not bound by marriage — who share profits, losses, & liabilities. A written agreement contains all the partnership agreements. It is not required to register with the Secretary of State when forming a general partnership.
3. Limited Partnerships:
Made up of one or more general or limited partners. While they share profits, partners' losses are limited to their investments. The State of Washington requires you to register with the Secretary of State when forming a limited partnership. Federal taxes are filed as a separate entity and certain criteria must be met to avoid being taxed as a corporation.
4. Limited Liability Partnership (LLP):
Comparable to general partnerships, with the exception that partners are not held liable for the negligence of other partners. This structure is typically used by lawyers and accountants. In Washington, all LLCs are required to register with the Secretary of State. For LLCs, there is no federal tax at the entity level.
5. Limited Liability Company (LLC):
Composed of one or more shareholders who are bound by a written agreement containing all the details of operation, including distribution of profits and losses, management, and more. LLCs are required to file with the Washington Secretary of State. Depending on the structure, the LLC is not taxed at the entity level.
6. Corporation:
Corporations are complex business structures. As a corporation, you may enjoy certain tax and/or financial benefits, but control is divided between shareholders, who are not typically responsible for corporation debts. The State of Washington requires all corporations to file with the Secretary of State. Corporations may be taxed at the entity level.
7. Nonprofit Corporation:
Ideals and goals—other than profit—form the bedrock of nonprofit organizations. They may serve the public interest or exist in the private sector. If you plan to raise funds from the public, you may have to register with the Charities Program of Washington Secretary of State.
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Washington Business Formation Fees:
Fee Type | Cost |
|---|---|
LLC | $180.00 |
Corporation | $180.00 |
Nonprofit Corporation | $40.00 — $80.00 |
Limited Partnership | $180.00 |
Limited Liability Partnerships | $180.00 |
Expedited Service | Additional $50.00 |
Name Reservation | $30.00 or $20.00 for nonprofits |
