Do I need an LLC?

Washington LLC annual report and B&O tax

Last verified 2026-10-31. Official sources linked below; unverified items are labeled.

Short answer. A Washington LLC pays a $70 annual report, due by the last day of the month in which it was formed, every year (a late report adds a $25 delinquency fee). Washington has no personal income tax and no franchise tax, but nearly every business, LLC or sole proprietor, owes the state B&O tax on gross receipts (1.5% for most service income under $1 million), with no deduction for expenses. Most businesses also get a Department of Revenue business license ($50 to open). This site does not compute the B&O tax.

Informational only. Not legal or tax advice. Confirmed means read on an official government page on 2026-10-31. Estimates are shown apart and are never added to confirmed totals.

What you must file

The B&O tax: Washington's gross-receipts tax

Washington has no corporate or personal income tax on business profit. Instead, "virtually all businesses in Washington are subject to the state business and occupation (B&O) tax," including "corporations, limited liability companies (LLCs), partnerships, and sole proprietors," and it "is calculated on gross income from business activities" (Department of Revenue business tax structure). verified That means it is a percentage of what you take in, not of your profit, so a business with a loss can still owe it. Forming an LLC does not remove it, and staying a sole proprietor does not avoid it.

This site does not compute any B&O amount. It is excluded from every total.

The business license

Most Washington businesses register with the Department of Revenue and get a business license. The page lists triggers such as gross income of $12,000 a year or more, using a name other than your legal name, planning to hire within 90 days, or having to collect sales tax. A domestic LLC must file with the Secretary of State before the Business License Application (Apply for a business license). The application fee is $50 to open a new business ($10 for other purposes) (Business Licensing Service fee sheet). verified City and county endorsements cost extra and are not covered here.

What is different for a sole proprietor

A sole proprietor does not register with the Secretary of State, so there is no annual report (our inference, not stated on a page read). The B&O tax and the business license triggers apply to a sole proprietor just as they do to an LLC. Washington does not currently have an individual income tax (Department of Revenue), so a sole proprietor's remaining duties are federal: Schedule C, self-employment tax and federal estimated tax on April 15, June 15, September 15 and January 15 (Form 1040-ES; dates on a weekend or holiday move to the next business day).

Not covered

City and county business taxes and licenses are not covered here and are not in any total; several Washington cities have their own B&O tax. Washington sales tax on software or digital products is not computed in the totals. Check with the Washington Department of Revenue before you sell to Washington customers.

Sources (read 2026-10-31)

What this page doesn't tell you

Whether you need an LLC yet, your own annual report month, which B&O classification and credit fit your business, whether you must file a B&O return, or what forming in Wyoming would add. The calculator takes your answers and returns a verdict, your numbers and a dated checklist you can download as a PDF and calendar file.

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Frequently asked

When is the Washington LLC annual report due?

It is due by the last day of the month in which the LLC was first formed, and it may be filed up to 180 days before that date. An LLC formed in November 2026 files its first annual report by November 30, 2027, then every year in November.

How much is the Washington LLC annual report?

The annual report for an LLC is $70, plus an online processing fee whose amount was not found. A report that is late adds a $25 delinquency fee.

Does Washington have an LLC income tax or franchise tax?

No. Washington does not currently have an individual income tax and has no franchise tax. Instead, nearly every business owes the B&O (business and occupation) tax, which is a percentage of gross receipts, not profit. A new 9.9% tax on adjusted gross income above $1 million starts Jan. 1, 2028.

Do I owe B&O tax if my LLC lost money?

It can apply anyway, because the Department of Revenue says the B&O tax is calculated on gross income from business activities, not on profit. A small business credit may reduce or erase it, and a return may not be required below a filing threshold, so check the current rules with the Department of Revenue.

Does a sole proprietor pay the Washington B&O tax?

Yes. The Department of Revenue says virtually all businesses in Washington are subject to the B&O tax, including LLCs, corporations, partnerships and sole proprietors. Forming an LLC neither adds nor removes it.

Do I need a Washington business license for my LLC?

Often yes. The Department of Revenue lists triggers such as gross income of $12,000 a year or more, using a trade name, planning to hire within 90 days, or collecting sales tax. A domestic LLC files with the Secretary of State first. The application fee to open a new business is $50.

Related: Washington LLC cost, Texas LLC franchise tax and About this data.

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