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) 725-0377.
To register, file a Business License 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 Business Licensing Service 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
 Effective June 1, 2010, an “economic nexus” standard rather than a “physical presence” standard was created. It requires some businesses earning “apportionable income” (including service and royalty income) from Washington customers to be subject to taxes whether or not they maintain offices in the state or have any physical presence. See Economic Nexus for more information.
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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Reseller Permits
Effective January 1, 2010, the resale certificate was replaced with a reseller permit issued by the Department of Revenue. Reseller permits are 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.
Reseller permits are free and are issued to businesses that make wholesale purchases. The permits allow businesses to purchase items or services for resale without paying retail sales tax.
For more information on reseller permits, see our Reseller Permit page.
References
Washington Administrative Code (WAC) 458-20-102
Excise Tax Advisory (ETA) 3005.2009 (pdf)
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
Business Licensing Service
Business Licensing
1-800-451-7985
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