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Doing business in

Washington

Navigate Washington’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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washington

Business Overview

Washington features a diverse economy anchored by technology, aerospace, agriculture, and international trade. The state offers no income tax, strategic Pacific Rim location, and specialized workforce development. Its innovation ecosystem supports technology development and commercialization.

Key Facts & Figures

Category Details
Capital Olympia
Major Cities Seattle, Spokane, Tacoma, Vancouver, Bellevue
State Sales Tax Rate 6.50%
Local Sales Tax Rate Up to 4% additional local taxes
Corporate Income Tax 6% flat rate
Physical Nexus Threshold Physical presence through employees, property, or representatives
Economic Nexus Threshold $100,000 in annual sales

Did you know?

Washington is home to global tech giants like Microsoft and Amazon, driving significant technological innovation.

Setup & Compliance

Washington offers centralized business registration with unique tax considerations.

Washington Business Formation Steps:

  1. Choose Your Business Structure: Consider Washington’s tax environment, including no income tax but B&O tax.
  2. Register Your Business: File formation documents with the Secretary of State.
  3. Register with Department of Revenue: Complete business license application for state and many local registrations.
  4. Obtain Required Licenses: Research and secure necessary additional licenses and permits.
  5. Register as an Employer: Register with the Employment Security Department if hiring employees.

Unique Washington Compliance Considerations:

  • Annual Reports: Washington entities must file annual reports with the Secretary of State.
  • Business & Occupation (B&O) Tax: Instead of income tax, businesses pay B&O tax on gross receipts.
  • Sales Tax Collection: Collect and remit 6.5% state sales tax plus applicable local taxes.
  • No Income Tax: Washington does not impose corporate or personal income tax.
  • Workers’ Compensation: Washington requires all employers to obtain coverage through the state program.

Hiring & Payroll

Washington provides robust worker protections with several state-specific regulations.

Washington Payroll Requirements:

  • Unemployment Insurance: Rates from 0.13% to 6.1% on first $67,600 of wages.
  • No state income tax withholding.
  • Paid Family and Medical Leave: Mandatory contribution starting 2019.

Washington Employment Laws:

  • Minimum Wage: $15.74 per hour (as of 2023).
  • Paid Sick Leave: Employers must provide paid sick leave for all employees.
  • Final Paycheck: Due on next regular payday.
  • Mandatory rest and meal breaks.
  • Washington is not a right-to-work state.

State Incentives

Washington offers comprehensive economic incentives to support business innovation and growth.

Key Business Incentives:

  • Washington Research Service Credit: Tax incentives for research activities.
  • Rural Jobs Program: Support for businesses in rural areas.
  • Clean Technology Tax Incentives: Support for green technologies.

Small Business & Startup Support:

  • Washington Small Business Development Center: Comprehensive business resources.
  • Minority and Women-Owned Business Assistance Program.
  • Innovation Partnership Zones: Support for technology transfer.

Regulatory Considerations

Washington provides a progressive regulatory environment supporting innovation.

Key Business Regulations:

  • Data Privacy: Advanced laws protecting consumer and business information.
  • Environmental Compliance: Comprehensive regulations supporting green technologies.
  • Professional Licensing: Mandatory for various professional services.

Additional Regulatory Areas:

  • Technology and Software Industry Compliance.
  • Sustainable Business Practices Regulations.

Explore Tax & Compliance Topics

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