Washington Business License
1) Washington State Business Taxes -
There are a myriad of different taxes that are associated with running a business in the state of Washington. You will need to register your business with the state and pay the associated fees and taxes.
The following are the different types of taxes levied on business owners in the state:
Business and Occupation tax - The Business and Occupation tax (B&O tax) is levied on the gross revenue of your business. There is no deduction you can take for your labor or product costs. Some localities charge a B&O tax as well. Information on which localities charge the B&O tax is located here under Part 3.
Retail Sales tax: Retail sellers and some construction and service providers must collect a retail sales tax from customers in the state.
Use tax: When your business makes a purchase that did not require the payment of tax, you owe a use tax to the state of Washington.
Industry-Specific taxes: There are also taxes levied on specific types of businesses, such as:
Rental car taxes - If you have a vehicle rental enterprise
Public utilities taxes - Levied on your water, gas and electric power services received
King County Convention and Trade Center tax - If you provide overnight lodging in King County
Tobacco Products tax
In order to find out what taxes are specific to your industry in the state of Washington, you need to go to the Industry Guides page from the Washington State Department of Revenue (DOR) page.
Real Estate and Personal Property taxes: Business owners in the state must also pay taxes on the real estate and personal property used in their business. In this case, personal property is property that one uses in the course of business that can be moved, such as equipment, supplies, furniture and machinery.
2) Business Licenses -
State Business License: In order to do business in the state of Washington, you must apply for a business license. You can either apply for the license online in about 15 to 30 minutes, or you can submit a paper application and mail in your fees.
Washington State Tax ID: Your business license will allow you to apply for a Washington State Unified Business Identifier (UBI) Number. This is the number you will need when you pay the above-mentioned state business taxes.
Industry-Specific Permits and Licenses: The general business license application will cover over 100 different types of state business licenses, but there are more types of licenses required by municipalities and by other state and federal guidelines. You will be able to determine if you need additional licensing by consulting the Business Licensing Wizard. The cost of these additional licenses can vary greatly.
3) Local Permits -
Local governments often require businesses to purchase additional permits and/or licenses. Some of the most common licenses and permits required by localities in the state include alarm, building, health, occupation, signage and zoning permits.
4) Incorporation Filing -
If your business is a corporation, LLC, partnership, or non-profit, you must also register with the Washington State Corporations Division.
5) Doing Business As (DBA) -
If you prefer your business name to not be your personal name, you must register for a trade name with the Secretary of State. You cannot use a name that is already taken, but you can determine if your chosen business name is unique on the web page for the Business Licensing Service relating to trade name registration. On this same page, you can also complete the online registration process.
FAQ page for trade name registration
Employer Requirements -
If you have any employees, you will need to take care of the following other legal requirements in the state of Washington:
6) Withholding Income Taxes -
As an employer, both the state of Washington and the federal government require you to keep employment tax records for four or more years:
The information for each employee, such as their address and social security number.
Your employer identification number for both the state of Washington and the federal government.
Salary and compensation information, including wages, pensions and annuities.
W-4 forms for each employee
The IRS has an Employer's Tax Guide.
Internal Revenue Service (IRS) W-4 and W-2 Forms -
For each new hire or re-hire, you must have them fill out a signed IRS Form W-4 to be remitted to the IRS. This form helps the employee determine the proper tax withholding amount.
The IRS Form W-2 provides the IRS and the state of Washington with the totals of wages and state and federal taxes withheld from the employee's wages. The forms can be transmitted electronically to the state and federal government. The form is also sent to the Social Security Administration. Employees must receive their copies of the W-2 by the end of January following the tax year. This web page provides more information on this process and deadlines.
7) Federal Employee Eligibility Verification (Form I-9)-
New hires must fill out an IRS Form I-9. This provides proof that the worker is eligible to work in the United States. As an employer, you have to keep a copy of this form for each of your employees. This form is available from the Department of Homeland Security.
8) New Hire Reporting -
The Washington State Department of Social and Health Services requires all employers to notify them of all new hires and re-hires. The reason for this reporting requirement is to ensure that child support is being paid within the state. You can report new hires online. All new and re-hires must be reported within 20 days. There is also a multi-state new hire reporting capability if you have employees from multiple states. You can also fax, phone or mail in the information.
9) Insurance Requirements -
Unemployment tax: If you have employees, you are liable to pay unemployment taxes. This system is a safety net for workers who are out of work. You will have to pay the tax and file quarterly reports to the Washington State Employment Security Department. The relevant forms are found here.
Worker's Compensation tax: The Washington State Department of Labor and Industries oversees the state's workers' compensation program. This program provides benefits for workers injured or made ill while on the job. You are required to pay the tax and file quarterly reports.
Finally, the state of Washington has a Small Business Liaison service to help small business owners navigate through all of the regulations
Is There a General Business License in Washington?
You may need more than one license depending on your business activity. A Washington State Master Business License may also be required. A city business license is required in most cities of Washington. To find out which forms are required, contact your local cityâ€™s office. This can be done in person, or you can visit the city's website under the business section.
Washington Business Licenses Are Required for Anyone
Except for the following examples, a Washington business license is required.
- Your business doesn't provide any service for retail sales tax.
- Your business is worth less than $12,000 annually.
- Your business is not required by the Department of Revenue to collect or pay any tax (public utility tax, use tax, etc.).
- Your business does not need to apply for a Master License Service of Washington.
- You do not plan on having employees in the next 90 days.
- You work only under your legal name.
When Should You Apply for a Washington Business License?
A Washington state business license is required for anyone who wants to start a company or update information. Some other examples of when you need to apply for one include:
- When you need to obtain a state specialty or business license
- When you change ownership
- When you change or open a business location
- When you register or modify a trade name
- When you hire employees
- When you switch to industrial or unemployment insurance coverage
Is There a Difference in Filings for Different Business Entities Within the State of Washington?
The business entity refers to the structure of the business (sole proprietor, general partnership, or corporation). The Washington Secretary of State may regulate your entity if you are one of these business entities. You can file the Washington Master Business Application if your business structure is a general partnership or sole proprietorship.
If your business structure will be one of the following, you must file with the Office of the Secretary of State at www.secstate.wa.gov/corps/ before filing the Washington State Master Business Application:
- Limited Partnership
- Limited Liability Company
- Limited Liability Partnership
If your business requires specialty licenses (i.e., vehicle dealer, liquor, etc.), you will need to send that extra paperwork and the Washington Master Business Application along with any supporting documents to the Secretary of State.
If your business does not require specialty licensing, you may file the Master Business Applications with the Secretary Of State simultaneously with your papers.
What is a Master Business Application?
The Washington Master Business Application can be used to apply for numerous state licenses or permits. You can also use it to apply for certain city licenses. Visit http://www.dol.wa.gov/business/ to learn more.
How Do I Apply for a State Business License?
There are three ways to file for a state-issued business license:
- Apply online.
- Mail: Please send completed forms and an application along with a check or money order payable to the "Washington State Treasurer" to Master License Service (Department of Licensing), PO Box 9034, Olympia, WA 98507-9034.
- You can also visit any business licensing office in person.
What Are the Requirements for a Business License Application?
These items might be required.
- Type of ownership (LLC, sole proprietorship, etc.)
- Address and business location
- Addresses and names of owners
- A sole proprietorship will require social security numbers. It is required for all partners, officers, and LLC members.
- Federal Employer Identification Number (FEIN) for legal entities