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:
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.
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.
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.
Physical presence - Retail sales
For businesses making retail sales into Washington, a person has a substantial nexus with this state if the person has a physical presence Washington in the current or preceding calendar year. For nexus purposes, a person is physically present in Washington if the person has property or employees in Washington. A person is also physically present in Washington if the person, either directly or through an agent or other representative, engages in activities to establish or maintain a market for its products in Washington. See RCW 82.04.067(6).
A few examples of nexus-creating activities include, but are not limited to:
- Soliciting sales in Washington through employees or other representatives
- Installing or assembling goods in Washington, either by employees or other representatives
- Maintaining a stock of goods in Washington
- Renting or leasing tangible personal property in Washington
- Providing services in Washington
- Constructing, installing, repairing, maintaining real property or tangible personal property in Washington
- Making deliveries of goods into Washington using the taxpayer's own vehicles
Economic Nexus standard – Retail sales
Effective July 1, 2017, businesses with sales into Washington may be subject to the B&O tax whether or not they have any physical presence in Washington.
Out-of-state businesses making retail sales into Washington are subject to the business and occupation (B&O) tax if they meet any of the following economic nexus thresholds during either the current or prior calendar year:
- More than $267,000 of gross receipts sourced or attributed to Washington
- At least 25 percent of total yearly gross receipts sourced or attributed to Washington
This new economic nexus standard for retail sales is in addition to the physical presence standard.
See New nexus standard for Retailing B&O tax for more information.
Economic Nexus standard – Apportionable income & wholesale sales
Out-of-state businesses making sales into Washington and/or with income attributable to Washington will be subject to the B&O tax if they meet any of the following economic nexus thresholds during either the current or prior calendar year:
- More than $267,000 of gross income sourced or attributed to Washington
- More than $53,000 of payroll in Washington
- More than $53,000 of property in Washington
- At least 25 percent of total property, payroll, or income in Washington
These thresholds are adjusted periodically based on changes to the Consumer Price Index.
The economic nexus standard, now applicable to retailers, has applied to businesses making wholesale sales since September 1, 2015, and to businesses earning apportionable income since June 1, 2010.
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:
- See Economic Nexus
- Trade Convention Exception from Nexus for Retail Sales
To learn your appeal rights, visit our online Reviews and Appeals Guide.
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.
Out-of-state businesses may have a tax obligation for the remainder of the year and one additional year after they stop doing business in Washington. During this period
- Business and occupation tax applies to income from sales in Washington and services attributable to Washington for one year following the year nexus is created.
- Sales tax must be collected on all taxable retail sales that take place in Washington for the remainder of the calendar year in which nexus ceased and the following year
If you have questions on your tax obligation, you may request a tax ruling.
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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.
- RCW 82.04 Business and Occupation Tax
- RCW 82.16 Public Utility Tax
- WAC 458-20-102 Resale Certificates
- WAC 458-20-170 Construction
- WAC 458-20-173 Installation and Repairs
- WAC 458-20-193, WAC 458-20-194 Interstate and Foreign Sales (nexus)
- WAC 458-20-254, RCW 82.32.070 Recordkeeping
Small Business Guide Washington State (Governor's Office of Regulatory Assistance)
Labor and Industries
Industrial Insurance & Contractors Bonding
Employer Services (360) 902-4817
Contractors Bonding (360) 902-6359
Business Licensing Service