Five Things To Know Before Starting A Washington Company

Five Things to Know Before Starting A Washington Company

Starting a company in Washington state is a confusing and tedious process. Here are five things that you should know before you start your new company.

1) You’ll need to make a lot of filings.

Washington has many different and overlapping government agencies, so you’ll need to make a lot of filings when starting a new company in Washington. The agencies include the Secretary of State, Department of Revenue, Employment Security Department, and the Department of Labor and Industries, not to mention the specific state licensing requirements your company may need to comply with depending on the work your company will do. And, on top of all that, most Washington cities require companies to obtain local business licenses. To find out which agencies your company must register with, consider using Washington’s Business License Wizard (search for “Business License Wizard” in that link).

Pro tip: Our experience has been that some state agencies don’t communicate well with each other, so if your company makes a filing with one agency, don’t assume that other agencies have access to that filing or will try to get access for you.

2) You’ll register your assumed business names with the Department of Revenue.

Washington is weird: companies must register their assumed business names (Washington refers to assumed business names as “trade names”) with the Department of Revenue and not with the Secretary of State. Most states require companies to register their assumed business names with their respective Secretary of State’s office, which is the office where companies file all their other incorporation paperwork, but for some reason Washington state gave that job to the Department of Revenue. So, if you want to register an assumed business name in Washington, you’ll need to do that when applying for a business license through the Department of Revenue.

3) You will receive many registration numbers.

Here are the registration numbers and other identifying numbers and letters you’ll receive when forming a Washington company:

– UBI (Unified Business Identifier) Number: This is also sometimes referred to by state agencies as the tax registration number, business registration number, or business license number.

– Account ID: This is actually the exact same number as the UBI, but for some reason the Department of Revenue has two names for the same thing. 

– Letter ID: This is the identification number on the initial tax registration confirmation letter that your company will receive from the Department of Revenue. It is really important that you not lose this letter. You will need it to access your company’s account. If you lose it, it can be very difficult (and time-consuming) to obtain a copy of the Letter ID.

– SAW User ID: This is the user identification that your company will obtain when making any registrations with the Department of Revenue. It’s effectively your company’s username when logging into the Department of Revenue’s site.

4) Washington has no income tax, but it has many other taxes. 

Yes, the state of Washington has no income tax, which obviously is a great benefit to running a company in the state. But, the state has many other taxes that may apply to your business, including excise tax, personal property tax, and sales tax. 

After you register your company with the Department of Revenue, their office will inform you about how often your company must file excise tax returns (the excise tax is also referred to as the business and occupation “B&O” tax). And, their office will regularly email you when your company’s excise taxes are due, so be ready to potentially receive a lot of emails from the Department of Revenue about that subject.

All companies in Washington must, with some exceptions, pay property taxes on all personal property — for example, computers, furniture, and other tangible property — used by the company to conduct business. County assessors manage personal property taxes, so if your company is using personal property in Washington, make sure to check the requirements of your local county assessor.

Like most states, Washington imposes a sales tax. If your company wants to avoid paying sales taxes on items purchased for resale, then your company should consider applying for a reseller permit. 

5) If your company has employees, it’ll have to make filings with Washington’s Employment Security Department.

If your company has employees in Washington state, there’s yet one more required registration. After your company completes its Business License Application with the Department of Revenue, that agency will notify the state’s Employment Security Department that your company has employees, and from there the Employment Security Department will send your company a letter with instructions for filing wage reports and paying unemployment insurance taxes.

There you go. Those five things above should help you better understand the many requirements and in-and-outs of starting a new company in Washington state. There are more wrinkles, to be sure, but those five things will give you a big leg up when you’re just getting started. 

Or, if you’d like help in getting started, we can do all the work for you.