Below is a list of several state departments and agencies, and the specific business-related services they oversee. There are more operating considerations that businesses must be aware of than is included in this guide. The following information is intended to be a short primer for businesses to understand some of the primary procedures that apply to organizations doing business in Washington State. Because requirements and tax rates are subject to change, information provided here may become outdated. For more information, contact the IRS, state and local government, and your accountant.
Secretary of State
Contact the Washington State Secretary of State for the following business-related activities:
Trade Name Registration. If using a name for your business other than your own legal name, you must register for a trade name. Registration provides no legal protection of the business name. If you want the name protected for your exclusive use, you must file for a state trademark (if your business activity is entirely within the state) or a federal trademark (if your business activity extends beyond state boundaries). State trademark registration is $50.
Incorporating a business. If you incorporate your business, you must complete an “Articles of Incorporation” form and submit it to the Corporations Division in the Office of the Secretary of State. The filing fee is $175 for standard corporations and $30 for non-profit corporations.
Limited Liability Company Formation. If your business will be a limited liability company or limited liability partnership, you must complete a “Certificate of Formation” form and submit it to the Corporations Division in the Office of the Secretary of State. The filing fee is $175.
Annual Incorporation renewal.
Department of Revenue
Contact the WA Department of Revenue for the following business-related activities:
State Business License. Most businesses require a standard business license, issued by the state department of licensing. Some non-retail, non-construction businesses with expected revenues of less than $12,000 per year do not need to register with the state. Obtain confirmation from the Washington State Department of Revenue if you think you may fit within the exempt criteria. Business license fee: $15 for basic license; $5 for trade name registration.
Business & Occupation Taxes. Businesses are responsible for completing the state excise tax return, generally on a monthly or quarterly basis. B&O taxes are assessed on gross revenues, and the B&O tax rate is determined by type of business activity.
Sales Tax Collection. Businesses subject to sales tax (retail, construction and some services) must collect sales tax must collect the tax on each sale to a customer. Sales tax collections are reported on the excise tax return and remitted at the time when B&O taxes are due (generally monthly or quarterly). Because a portion of the sales tax is returned to the local community by the Washington State Department of Revenue, sales tax is reported by the location of tax collection on the state excise tax return. If you make sales in multiple communities, you will need to keep records of tax collections in each location.
Use Tax. Use taxes are required when business equipment, supplies, etc., are purchased out of state and no sales tax (or a lesser sales tax) is paid to the state where purchased. The use tax rate is based on your location.
Department of Licensing
Contact the WA Department of Licensing for the following business-related activities:
Specialty Licenses. State specialty licenses are required for many businesses, such as counselors, hair stylists, telephone solicitors, cigarette sellers, nurses, engineers, dentists, etc. Specialty license costs vary.
Department of Labor & Industry
Contact the WA Department of Labor & Industry for the following business-related activities:
Contractor Licenses. Contractor licenses and bonds are required for general and specialty contractors (which include most “real property”-related businesses, even those not typically considered as part of the building trades, such as power washing, landscaping, and handyman services). The license fee is about $100. General contractors must post a $12,000 bond; specialty contractors $6000. Additionally, contractors must carry a minimum level of property damage and liability insurance, and may need or wish to carry workers’ compensation coverage.
State Industrial Insurance (Workers’ Compensation) In the State of Washington, employers are required to insure their workers for job-related illness and injury through the Washington State Department of Labor and Industries (qualified employers with substantial financial resources may be permitted by L&I to self-insure). Industrial insurance is handled much like an employment tax, with a tax return and payment due by the end of the month following the end of the quarter. Industrial insurance rates are based on the “risk” of the workers’ job activity, and are assessed on a per-hour of work basis. Employers may have workers in several rating classifications. Employers may withhold a portion of the industrial insurance premium, as defined by L&I, from employee paychecks.