Does Washington state have income tax for LLCs?

No. Washington has no personal state income tax and no corporate income tax. This makes it attractive for LLC owners who live and operate in the state. However, Washington does impose the Business & Occupation (B&O) Tax, which is a gross revenue tax — not a profits tax.

What is Washington's Business & Occupation (B&O) Tax?

The B&O Tax is a gross receipts tax applied to virtually all Washington businesses. The rate varies by industry: 0.471% for retailing, 0.484% for service businesses, 1.5% for professional services, and higher rates for some categories. Importantly, it is based on gross revenue — not net profit — so you owe it even if you are operating at a loss.

How much does it cost to form a Washington LLC?

The state filing fee is $200. Annual report fees are $70/year, due by the last day of the LLC's anniversary month. Registered agent services typically cost $50–$200/year.

What is a Washington UBI number?

A Unified Business Identifier (UBI) is a Washington state business registration number issued when you register with the Department of Revenue. You need it to operate, collect sales tax, and file B&O tax returns. It is separate from your federal EIN.

When is the Washington LLC annual report due?

The annual report is due by the last day of the LLC's anniversary month — the same month the LLC was originally formed. For example, if you formed in June, the report is due June 30 each year. The fee is $70.

Does Washington require an operating agreement?

Washington law does not require an operating agreement for LLCs. However, it is strongly recommended — especially for multi-member LLCs — to establish clear ownership percentages, voting rights, and profit distribution rules.

How to Start a Washington LLC in 2026: No Income Tax, B&O Tax & Requirements

Formation Fee	$200
Annual Report Fee	$70/year
Annual Report Due	End of anniversary month
Registered Agent Required	Yes (WA address)
State Income Tax	None (0%)
B&O Tax	0.471%–1.5%+ on gross revenue
Privacy Protection	Low
Official Filing Website	WA Secretary of State

1. Washington LLC Overview

Washington is home to Seattle, one of the most prominent tech hubs in the world, and hosts major companies including Amazon, Microsoft, and Boeing. Key features of forming a Washington LLC:

No state income tax — Washington has no personal or corporate income tax
B&O Tax — a gross revenue tax that applies to most businesses regardless of profit
$200 formation fee — slightly higher than average
$70/year annual report — reasonable ongoing cost
Strong Seattle tech economy — access to capital, talent, and major enterprise customers

Understand the B&O Tax Before Forming

Washington's Business & Occupation Tax is applied to gross revenue — not profit. You owe it even if your business is losing money. Service businesses pay 0.484%, while some professional categories pay up to 1.5%+. Make sure you register with the WA Department of Revenue and account for B&O in your pricing.

2. Washington LLC Requirements

Name must include "Limited Liability Company," "LLC," or "L.L.C."
Appoint a registered agent with a Washington physical address
File Certificate of Formation with the WA Secretary of State ($200)
Register with the WA Department of Revenue and obtain a UBI number
File annual report by end of anniversary month each year ($70)
File B&O tax returns quarterly or annually depending on revenue

3. Washington LLC Costs and Fees (2026)

Cost Item	Amount	Notes
Certificate of Formation	$200	One-time state filing fee
Annual Report	$70/year	Due end of anniversary month
Registered Agent	$50–$200/year	Required WA physical address
B&O Tax (varies)	0.471%–1.5%+ of gross revenue	Quarterly or annual filing
EIN	Free	Apply at IRS.gov
Operating Agreement	$0–$1,000	Recommended, not required

4. How to Start a Washington LLC (Step by Step)

1 Choose your LLC name (must include "Limited Liability Company," "LLC," or "L.L.C.")
2 Appoint a registered agent with a Washington physical address
3 File Certificate of Formation online with the WA Secretary of State ($200)
4 Obtain an EIN from the IRS (free at IRS.gov)
5 Register with the WA Department of Revenue for Business & Occupation (B&O) Tax if applicable
6 Obtain a Washington Unified Business Identifier (UBI) number
7 Draft an Operating Agreement (recommended)
8 File annual report by end of the anniversary month each year ($70)
9 Open a business bank account

5. Washington Business & Occupation (B&O) Tax

The B&O Tax is Washington's primary business tax. Key rates for common business types in 2026:

Business Activity	B&O Rate
Retailing	0.471%
Wholesaling	0.484%
Services (most)	1.5%
Manufacturing	0.484%
Extracting	0.484%

B&O Tax Small Business Credit

Washington offers a Small Business B&O Tax Credit for businesses with annual B&O tax liability under $1,080. Businesses with very small revenue may owe little or no B&O tax after this credit. Check with the WA Department of Revenue for current thresholds.

6. Washington LLC Taxes (2026)

State income tax — None ($0)
B&O Tax — 0.471%–1.5%+ on gross revenue (based on business type)
Federal income tax — pass-through to personal return
Self-employment tax — 15.3% on net earnings
Washington sales tax — 6.5% state rate + local additions (Seattle combined rate is 10.25%)
Capital gains tax — Washington passed a 7% capital gains tax (applies to long-term capital gains over $270,000)

7. Best For / Not Best For

Best For

Entrepreneurs living or operating in Washington state
Tech founders and startups in the Seattle/Bellevue ecosystem
Businesses wanting no state income tax in a major West Coast market
Companies with Washington employees, customers, or offices
E-commerce sellers with Washington nexus

Not Best For

Out-of-state founders with no Washington presence (home-state filing is simpler)
Cost-sensitive founders: $200 formation + $70/year + B&O tax
Businesses unaware of Washington's B&O gross revenue tax (applies even with no profit)
Privacy-focused owners (Washington is a public record state)