How to Form an LLC in Washington 2026: Complete Guide

Washington State offers a thriving business environment with no state income tax, a strong tech industry, and Pacific Rim trade access. Forming an LLC in Washington provides liability protection while avoiding state income tax on profits. This guide covers everything from filing with the Secretary of State to understanding Washington's unique Business & Occupation (B&O) tax.

Why Form an LLC in Washington?

• No State Income Tax: Washington has NO state income tax on individuals or pass-through entities
• Limited Liability Protection: Personal assets protected from business debts
• Pass-Through Federal Taxation: LLC profits taxed once at member level
• Flexible Management: Member-managed or manager-managed options
• Strong Economy: Tech hub (Seattle, Microsoft, Amazon), aerospace, trade
• Strategic Location: Pacific Rim trade gateway, Canada border
• Fast Processing: 2-3 business days for online filings
• Business-Friendly: Efficient online services, strong infrastructure

Step-by-Step Formation Process

Step 1: Choose Your LLC Name

Your Washington LLC name must comply with RCW 25.15.010:

• Be distinguishable from existing Washington business names
• Include "Limited Liability Company," "LLC," or "L.L.C."
• Not contain restricted words ("bank," "trust," "insurance") without proper licensing
• Cannot imply government affiliation
• Cannot include "Corporation," "Incorporated," or "Corp." (those are for corporations)

Name Search: Check Washington Business Search

Name Reservation (Optional):

• Reserve name for 180 days
• File Name Reservation online
• Fee: $30
• Can be extended for additional 180-day periods

Step 2: Appoint a Registered Agent

Every Washington LLC must have a registered agent (RCW 25.15.010):

• Has physical Washington street address (no P.O. boxes)
• Available during normal business hours
• Can be an individual Washington resident OR business entity authorized in Washington
• Receives legal documents, annual report reminders, and service of process

Options:

• Self-serve: You can be your own registered agent if Washington resident
• Professional Service: Hire registered agent company ($125-$300/year)
• Benefits of professional: Privacy, reliability, professional handling of documents

Step 3: File Certificate of Formation

Submit Certificate of Formation to Washington Secretary of State:

Filing Options:

• Online: Washington Corporations & Charities Filing System (2-3 business days) - $200
• By Mail: Send to Olympia office (5-10 business days) - $200
• Expedited 24-Hour: Additional $50 fee (next business day)
• Same-Day Service: Additional $100 fee

Mailing Address:

Washington Secretary of State
Corporations Division
P.O. Box 40234
Olympia, WA 98504-0234

Required Information:

• LLC name
• Registered agent name and Washington street address
• Principal office address (can be out of state)
• Mailing address (if different)
• Purpose of LLC (can be "any lawful business")
• Management structure (member-managed or manager-managed)
• Duration (perpetual or specific end date)
• Organizer name and signature

Step 4: Create an Operating Agreement

Not required by Washington law, but strongly recommended:

• Defines ownership percentages and capital contributions
• Outlines management structure and decision-making authority
• Profit and loss distribution rules
• Voting rights and procedures
• Buy-sell provisions and transfer restrictions
• Dissolution and winding up procedures
• Helps establish LLC as separate legal entity for liability protection
• Required by banks for business accounts

Step 5: Obtain an EIN

Get free Employer Identification Number from IRS:

• Online: IRS.gov (immediate) - recommended
• By Fax: Form SS-4 (4 business days)
• By Mail: Form SS-4 (4-6 weeks)

When Required:

• Multi-member LLCs (always required)
• Opening business bank account
• Hiring employees
• Filing federal tax returns

Step 6: Register for Washington State Taxes

Register with Washington Department of Revenue:

• Obtain UBI (Unified Business Identifier) number
• Register for Business & Occupation (B&O) tax
• Register for sales tax if selling goods or taxable services
• File online through Washington Department of Revenue
• No fee to register

Complete Cost Breakdown

Ongoing Requirements

Annual Report (Required)

Washington requires annual report filing (RCW 25.15.150):

• Fee: $73 (online filing)
• Due Date: By the end of the month in which LLC was formed (anniversary month)
• First Report: Due the year AFTER formation
• How to File: Online through Washington Secretary of State website
• Information Required:
  • LLC name and UBI number
  • Registered agent and office address
  • Principal office address
  • Names and addresses of members or managers
  • Brief description of business
• Late Filing: $25 late fee if filed after deadline
• Reminder: Secretary of State sends email reminder if email on file

Update Changes

If your registered agent or principal office changes:

• File Statement of Change online
• Fee: $30
• Update within 90 days of change

Business & Occupation (B&O) Tax

Washington's unique gross receipts tax (RCW 82.04):

What is B&O Tax?

• Gross receipts tax: Based on total revenue, NOT net profit
• No deductions: Cannot deduct expenses (unlike income tax)
• Different rates: Vary by business classification (0.13% - 3.3%)
• Applies to LLC: LLC entity pays B&O tax (not members)

Common B&O Tax Rates (2026)

• Retailing: 0.471% (retail sales of goods)
• Wholesaling: 0.484% (wholesale sales)
• Manufacturing: 0.484%
• Service & Other Activities: 1.5% (professional services, consulting)
• Royalties: 0.484%
• Financial Services: 1.5%

Small Business B&O Credit

Washington provides credit for small businesses:

• Annual credit: Up to $70 per year (2026)
• Who qualifies: Businesses with gross income under $20,000/month
• Effect: Many small businesses owe $0 B&O tax
• Example: Business with $100,000/year revenue at 1.5% rate = $1,500 tax - $70 credit = $1,430 due

B&O Tax Filing

• File monthly, quarterly, or annually depending on tax liability
• Annual if tax under $3,600/year
• Quarterly if tax $3,600-$9,600/year
• Monthly if tax over $9,600/year
• File online through My DOR

Sales Tax

If selling goods or taxable services:

• State rate: 6.5%
• Local rates: Vary by location (1.2% - 3.9%)
• Combined rates: Typically 7.5% - 10.5%
• Seattle rate: 10.35% (2026)
• Registration: Free through Department of Revenue
• Filing: Monthly, quarterly, or annually based on volume

Other Washington Taxes

Use Tax

• Applies to items purchased out-of-state for use in Washington
• Same rate as sales tax
• Typically reported on combined excise tax return

Employer Taxes (If You Have Employees)

• Unemployment insurance
• Workers' compensation (through Labor & Industries)
• Paid Family & Medical Leave (PFML)
• No state income tax withholding (Washington has no income tax)

Other Potential Taxes

• Litter tax: For certain product manufacturers/wholesalers
• Enhanced food fish tax: For seafood businesses
• Property tax: On real and personal property used in business

Business Licenses and Permits

State Business License

• No separate state license: UBI registration serves as business license
• UBI number obtained when registering for taxes (free)
• Industry-specific licenses may be needed (contractors, healthcare, food service, etc.)

Local Business Licenses

• City/County license: Required in most Washington cities
• Cost: Varies by locality ($15-$200+ annually)
• Seattle: Business license required, fee based on number of employees
• Varies by city: Contact local business licensing office

Professional Licenses

• Contractors: Department of Labor & Industries license required
• Healthcare providers: Department of Health licenses
• Real estate: Department of Licensing
• Food service: Health department permits

Professional LLCs (PLLCs)

Washington allows certain licensed professionals to form PLLCs (RCW 25.15.045):

Who Must Form Professional LLC

• Attorneys
• Physicians and healthcare providers
• Dentists
• Veterinarians
• Architects
• Engineers
• Accountants
• Other licensed professionals as defined by regulation

Additional Requirements

• All members must be licensed in same profession (or compatible professions)
• Name must include "PLLC" or "Professional Limited Liability Company"
• May require certificate from licensing board
• Does not shield from professional malpractice liability
• Same filing fee ($200) and annual report ($73)

Operating an Out-of-State LLC in Washington

If formed in another state but doing business in Washington, must register as foreign LLC:

When Required

• Maintaining an office in Washington
• Regularly conducting business in Washington
• Owning or leasing real property in Washington
• Hiring employees in Washington

Foreign LLC Registration

• File Foreign LLC Application online
• Fee: $200
• Designate Washington registered agent
• Submit Certificate of Good Standing from home state
• Annual report: $73 (same as domestic LLCs)
• Must register for Washington B&O tax and other applicable taxes

Dissolving a Washington LLC

To officially close your Washington LLC:

1. Vote to Dissolve: Members approve per operating agreement or statute
2. Wind Up Business: Pay debts, settle obligations, distribute assets
3. File Certificate of Dissolution: Online with Secretary of State
4. Fee: $20
5. File Final Tax Returns: Federal (1065/Schedule C) and Washington B&O/excise tax
6. Close UBI Account: With Department of Revenue
7. Cancel Business Licenses: State and local
8. Close Bank Accounts: After all obligations settled

Frequently Asked Questions

How much does it cost to form an LLC in Washington?

The filing fee is $200. First-year total costs are approximately $273 including the $73 annual report due the following year. If you hire a registered agent, add $125-$300/year. Washington's formation fee is higher than many states, but offset by NO state income tax on LLC profits.

Does Washington have state income tax for LLCs?

No. Washington has NO state income tax - not for individuals, not for LLCs, not for any pass-through entities. LLC members pay NO Washington state income tax on their LLC profits. However, Washington does have Business & Occupation (B&O) tax based on gross receipts, which the LLC entity pays.

What is B&O tax in Washington?

Business & Occupation (B&O) tax is Washington's gross receipts tax charged on total revenue (not profit). Rates vary by business classification, typically 0.471% to 1.5%. Unlike income tax, you cannot deduct expenses. Small businesses get annual credit (up to $70) which means many small LLCs owe $0 B&O tax.

How long does it take to form an LLC in Washington?

Online filings through the Washington Secretary of State typically process within 2-3 business days. Mail filings take 5-10 business days. You can pay for expedited 24-hour processing ($50 additional) or same-day processing ($100 additional) for faster approval.

Do I need a Washington address to form a Washington LLC?

Yes, you need a Washington registered agent with a physical Washington street address. However, your principal office can be anywhere. If you're out of state, hire a Washington registered agent service to provide the required Washington address (typically $125-$300/year).

Can one person form an LLC in Washington?

Yes. Washington allows single-member LLCs. The process is identical to multi-member LLCs, and you still receive full liability protection. Single-member LLCs are taxed as disregarded entities (sole proprietorships) for federal tax purposes unless you elect corporate taxation.

Does Washington require an annual report for LLCs?

Yes. Washington requires an annual report due by the end of the month in which your LLC was formed. The filing fee is $73 (online). You must update your LLC's registered agent, principal office, and member/manager information. Secretary of State sends email reminders if you provided an email address.