Table of contents
Overview
The state of Washington has no corporate or individual income tax. Washington relies on other taxes to fund public services. The three major taxes are:
Voluntary disclosure
If you have been doing business in Washington and are not registered with the Department of Revenue, you can come forward under the Voluntary Disclosure Program. Learn more about this program and how it can benefit you.
When to register
Out-of-state businesses must register with the Washington State Department of Revenue if:
- The business conducts activities that establish nexus sufficient for imposing B&O tax or the public utility tax.
- The business collects retail sales, use tax, or other taxes administered by the Department.
- The business collects Washington's use tax.
A business may not need to register if:
- Their annual gross income from Washington activities is less than $12,000.
- The business is not required to collect or pay sales tax or use tax.
- The business is not required to obtain a license or registration from another Washington State agency.
How to register
If your business is a corporation, limited liability company, or limited liability partnership, first contact the Corporations Division of the Secretary of State at (360) 753-7115.
To register, file a Master Business Application. This one form will register your business with the Department of Revenue, and other state agencies. When processed, a Unified Business Identifier (UBI)/Tax Registration Number will be issued.
See our new business information after you have registered.
County and city requirements
Many Washington cities and counties have licensing requirements and taxes on business activities. The Department of Licensing offers more information on licensing and tax requirements.
Nexus
Companies doing business in this state are subject to Washington tax laws when nexus is established. A few examples of nexus-creating activities include, but are not limited to:
- Soliciting sales in this state through employees or other representatives
- Installing or assembling goods in this state, either by employees or other representatives
- Maintaining a stock of goods in this state
- Renting or leasing tangible personal property
- Providing services
- Making repairs or providing maintenance or service to property sold
Taxability of construction and installation activities
Contractors who perform construction activities within this state are subject to Washington's excise taxes, even if they don't have a place of business here. Our Construction Guide can help you determine which construction and installation activities are taxable.
Do you perform personal/professional services from both inside and outside Washington? (Not including construction services.)
If so, you will need to follow certain guidelines for apportioning your income.
To learn more:
Appeals process
To learn your appeal rights, visit our online Appeals Guide.
Audit process
The Department of Revenue selects businesses for routine audits to determine whether the proper state excise taxes have been reported and paid. Learn more on our audits page.
Closing my account
Out-of-state businesses have a tax obligation for five years after they stop doing business in Washington. During this five-year period:
- Business and occupation tax applies to income from sales and services that take place in Washington.
- Sales tax must be collected on all taxable retail sales that take place in Washington.
If you have questions on your tax obligation, you may request a tax ruling.
Close my account now.
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Resale certificates (valid through 12/31/09)
A resale certificate is a document given by a buyer to a seller to document the wholesale sale.
What is it?
A resale certificate is a separate piece of paper or card given by a buyer to a seller of tangible personal property which says the goods:
- Are for resale in the regular course of business, without intervening use; or
- Will become a component of goods being resold in the regular course of business; or
- Are chemicals used in processing an article produced for sale.
- For use as feed, seed, seedlings, fertilizer, or spray materials in its capacity as a farmer
What is on a resale certificate?
The resale certificate states the buyer's:
- Name
- Address
- Type of business
- Tax Registration/UBl number (if required to be registered in Washington)
- Type of goods purchased
- Effective date
- Signature of the authorized buyer
- A statement about being responsible for the purchase and understanding the 50% penalty for misuse
- Name of the seller
Single use and blanket certificates
There are two types of resale certificates. The first is a one-time use certificate and must be given to the seller at the time of purchase. It is good for that purchase only. The second is a blanket resale certificate which may be given to a business which the buyer regularly purchases from. This certificate is valid for as long as the buyer and seller have a recurring business relationship. A “recurring business relationship” means at least one sale transaction in a continuous twelve month period.
Where do you get one?
Resale certificates (pdf) may be printed from our web site or purchased at a business stationery shop.
If no certificate
The seller must receive a resale certificate for goods purchased for the reasons listed above or charge retail sales tax on the purchase.
When received
The resale certificate must be received at the time of sale. Certificates received after the sale may not be accepted during an audit.
Are faxed certificates acceptable?
A seller may accept a facsimile copy of a resale certificate, but should get an original as soon as possible.
Tax Registration/UBI number on invoice
The tax registration/UBI number on an invoice is not sufficient. The seller must receive a signed certificate.
Update/how long to keep
Blanket resale certificates are valid for as long as the buyer and seller have a recurring business relationship. A “recurring business relationship” means at least one sale transaction in a twelve month period.
Single use resale certificates are valid for a single transaction between buyer and seller.
Possible reclassification of sale
During an audit, failure to have a valid, current resale certificate on file may result in the reclassification of the sale from Wholesaling to Retailing B&O tax by the auditor. This will cause the business to owe the retail sales tax for that sale.
References
Washington Administrative Code (WAC) 458-20-102
Excise Tax Advisory (ETA) 3005.2009 (pdf)
Reseller Permits
Effective January 1, 2010, the resale certificate will be replaced with a reseller permit issued by the Department of Revenue. Reseller permits will be issued to businesses that make wholesale purchases, including qualified contractors. The permits allow businesses to purchase items or services for resale in Washington without paying retail sales tax.
The Department will issue reseller permits based on specific criteria. Businesses that don't automatically receive a reseller permit may apply directly to the Department. The application will also be available on our web site.
Reseller permits will expire after a certain time period. The length of time a permit is valid depends on when the business registered with the Department. Businesses registered:
- Before January 1, 2009, will get a permit for 4 years.
- On or after January 1, 2009, will get a permit valid for 2 years that can be renewed for 4 years.
Special rules apply to the construction industry. Qualifying contractors must reapply every year because reseller permits for the construction industry are only valid for 12 months. Contractors will use a separate reseller permit application.
For more information on reseller permits, see our Reseller Permit page.
Resources
Employment Security
Unemployment Insurance
Status Unit
(360) 902-9360
Labor and Industries
Industrial Insurance & Contractors Bonding
Employer Services (360) 902-4817
Contractors Bonding (360) 902-6359
Department of Licensing
Business Licensing
Master Licensing Services
(360) 664-1400
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