Starting a Business in Washington State
There are numerous reasons why Washington State is a great place to start and grow a business. For instance, the first $43,000 of any business is tax-free in the Evergreen State. It is also one of the few states where individuals are not required to pay personal income tax to the state. It should come as no surprise that some of the wealthiest men in the world such as Jeff Bezos, Bill Gates and Paul Allen, among others, call Washington State home. But before a business owner can start reaping these benefits, s/he will first have to make it through the process getting a business license in Washington State.
When starting a business in Washington State, business people are required to examine state, county and municipal regulations relating to their business before starting the process of obtaining a business license. Here are the key general business licensing issues to consider.
Where Does a Washington State Business Owner Apply?
The State of Washington Business Licensing Service is responsible for issuing business licenses in Washington State. As a business owner, it is quite important to look at the State of Washington Business Licensing Service online portal. This is because it is the state’s central online place -- a place that will aid businesses in getting forms, info and resources for starting a business in Washington. It is also through another part of this website that business owners will complete the online process of a state business license application. Apart from this online application platform, business people can file their application by postal mail, as well as in-person at the Department of Revenue’s Business Licensing Offices, which are located in various cities across the state.
General Business Licenses
In most cases, starting a business in the state of Washington will require their business to be licensed on a state and on a city or county level. Typically, the state license establishes their business accounts with multiple Washington State agencies such as Labor & Industries, Department of Revenue and Employment Security. Note that many cities and counties use the state’s Business License Application alongside City Business License Addendum to enable their business to apply for both the state and the city licenses at the same time. There are already host of participating cities. However, if their city or county of location is not incorporated as a participating city, business owners have to contact the city directly to find out if additional licenses are required.
It is also crucial to note that the state business application process will require various information including; locations, name(s) of the business owners, projected annual gross revenues, any applicable insurance coverage, for example unemployment insurance and workers’ compensation, as well as employee hiring information.
Should business people be successful in their state licensing process, business owners will be issued with a Unified Business Identifier (UBI), sometimes called a tax registration number, which is basically a green light to do business in the state; however, this is just the start of the process.
For Clarity, here are the steps to be followed when applying for a business license in Washington State:
- Step 1: Choose a Business Structure
Business owners will be required to determine their business structure as the first process in getting the Washington state business license in their way to getting the UBI. In simpler terms, business people should determine whether their business will be a sole proprietorship, a Limited Liability Company (LLC), a general partnership, a limited partnership, or a corporation. While business owners are not be required to register with Washington Secretary of State to operate a sole proprietorship or a general partnership, the remaining structures of business (LLC, limited partnership and corporation) requires business people to register with the office of the Secretary of State. In fact, it is recommended that business people seek the assistance of a Washington registered agent or a qualified legal professional when opening any business that requires business people to register with the Secretary of State. Nonetheless, all businesses structures, be it a sole proprietorship, partnership, LLC or corporation, have to be licensed accordingly both in the state and within their cities or counties of operation.
- Step 2: Choose a Business Name/Trade Name Registration
Business structures (in this case, sole proprietorship and general partnership) are required to register a trade name or a “doing business as” (DBA) with the Business Licensing Service should the owner decide to operate the business under a name other than his/her personal name. On the same note, a corporation, LLC or limited partnership must register a trade name with the Business Licensing Service should the business decide to use a name other than the one registered with the Office of the Secretary of State. It is therefore advisable to search trade name databases in order to determine whether the desired trade name is available. This is where the applicant should register domain names for the business name and any current or proposed trade names (businessname.com and tradename.com are recommended, if available).
- Step 3: Choose the Desired Business Location
To register, business people are required to choose a business address and it must comply with each city’s “Home Occupation” rules. Generally, business people can run a business on any given address as long as it doesn’t affect or interfere with residents of the neighborhood.
- Step 4: File The their Application with the City
As noted above, many cities and counties use the state’s Business License Application alongside City Business License Addendum to enable their business to apply for both the state and the city licenses at the same time. However, some cities have their specific licenses and business owners have to apply for them to operate within their jurisdictions. Here’s a look at a few cities.
Seattle: After registering their business with the Washington state and getting the UBI, business owners will be required to obtain a Seattle Business License for the city. Known as Business License Tax Certificate, this will enable business people to operate within the city of Seattle and its jurisdiction. It is an annually renewable license that is valid until the end of the calendar year and costs $90 plus $10 for every added location within Seattle. It can be applied online (even though they’re currently not accepting electronic forms), by mail or in person at the City of Seattle, Revenue and Consumer Affairs.
Tacoma: On top of the UBI from the state, business people should obtain a City of Tacoma Business License, which is annually renewable at a fee of $80 plus $25 for every additional business location within Tacoma. You can apply online, by mail or in person at the City of Tacoma, Tax and License Division.
Everett: In addition to the UBI from the state, business people are required to obtain a City of Everett Business Tax Number Application at an annually renewable fee of $10.
Other cities within the Puget Sound region such as Olympia, Bellevue, Bremerton and Redmond, as well as other cities within the State of Washington comply with the City Business License Addendum. In other words, business people can apply for the Washington State business license alongside those of these cities.
- Step 5: Pay The Registration Fee
When applying the state business license, business owners will be required to pay a one-off fee of $19 by check or money order. Additionally, each city has its own licensing fee that varies from city to city. In most cases, these fees are annually renewable at the end of the calendar year and can be paid either in check or money order. Last but not least, there are specialties licenses as explained below.
Given that there are diverse types of businesses, their licensing requirements and responsibilities will differ depending on the nature of their business. Apart from the general business license, business people may be required to obtain further specialty and professional licenses and permits. For instance, an architect firm is required to obtain a specialty license and pay a renewable annual fee of $278. In essence, there are a lot of businesses and services that require specialty licenses in Washington State and the fees may vary depending on various factors, such as the location and branches.
Note that the application and renewal of certain specialty licenses can be done online, by mail or in-person with the State of Washington Business Licensing Service. Other businesses that require professional licenses, such as health care providers, engineers, attorneys and many more are required to apply and renew their specialty licenses through the relevant licensing authority of that given profession.
There is little doubt that obtaining a Washington State business license is a task destined to encounter some bureaucracy. Nevertheless, it is a simple-to-understand process that would definitely be a massive step towards opening business doors in the beautiful state of Washington. Being armed with this information, together with a lot more from the State of Washington Business Licensing Service online portal would do wonders.
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