Washington compliance for founders handling multiple states

Research steps and summary of findings: Steps taken - Ran broad web searches focused on Washington compliance for founders operating in multiple states, prioritizing official Washington government sources (Secretary of State and Department of Revenue) and reputable tax/compliance resources. - Scraped and extracted Washington Secretary of State materials (foreign registration statement PDF and online foreign LLC filing instructions) and Washington Department of Revenue guidance on the B&O tax and marketplace/remote-seller rules. - Collected employer-registration guidance showing how the Business License Application links to Employment Security (unemployment insurance) and Department of Labor & Industries (workers’ compensation). Analysis and key conclusions (actionable guidance for founders handling multiple states, Washington-focused) 1) Determine whether you are "doing business" in Washington (legal threshold) - The Secretary of State’s office warns it cannot make legal determinations for you: “We cannot evaluate or determine if your business’s activities qualify as 'doing business' in Washington State...” — you should evaluate activities (sales, employees, offices, inventory, agents) with counsel. If your activities meet WA’s standard for doing business or establish tax nexus, you likely must register as a foreign entity and register for taxes. 2) Foreign entity registration (Secretary of State) - If you decide you are doing business in WA, file a Foreign Registration Statement with the WA Secretary of State. Key requirements and practical points from the official form and online filing instructions: - Filing fee for a foreign registration is $180; expedited service adds $100. (See the Foreign Registration Statement instructions.) - You must attach a Certificate of Existence/Good Standing from your home jurisdiction issued within 60 days of filing. - All businesses must have a Registered Agent in Washington (RCW 23.95.415). The Registered Agent must consent and non‑commercial agents must have a physical Washington street address (no PO Boxes). - The Secretary of State will issue or link your filing to a Unified Business Identifier (UBI) if you don’t already have one. - Complete the online Foreign Registration Statement (or mail the PDF) and ensure the Registered Agent consent, principal office, and effective date are set correctly. 3) Business licensing and tax registration (Department of Revenue) - After SOS registration (or if you’re doing business in WA), register with the Washington Department of Revenue (via the Business Licensing Service / My DOR portal) to obtain a UBI and the tax accounts you need. The DOR links business licensing to tax and employer accounts: by applying for a business license and indicating you will hire employees, DOR will notify L&I and ESD to open workers’ comp and unemployment insurance accounts for you. 4) Sales tax and economic nexus (critical for remote sellers) - Washington enforces an economic nexus threshold: remote sellers and marketplace facilitators with more than $100,000 in combined gross receipts sourced or attributed to Washington (current or prior year) must register and collect sales tax. Marketplace sales count toward this threshold, and exempt sales are included when calculating the $100,000 threshold. If you cross the threshold, DOR requires you to begin collecting on the first day of the month that starts at least 30 days after you met the threshold. Marketplace facilitators have separate registration and reporting rules and often collect tax on behalf of sellers, but those facilitation sales still count toward sellers’ thresholds. 5) Business & Occupation (B&O) tax — another, often overlooked obligation - Washington does not have a corporate or personal income tax. Instead, it has the B&O tax, a gross‑receipts tax measured on the value of products, gross proceeds of sale, or gross income (no deductions for costs of goods sold, labor, etc.). If you meet nexus/thresholds for WA, you will likely have B&O tax obligations on Washington‑sourced gross receipts. DOR provides tax credits and specific credits/small-business relief that may apply — review credits on the DOR site. 6) Employer obligations if you have employees in Washington - If you hire employees who work in Washington, you must register for Unemployment Insurance (ESD) and Workers’ Compensation (L&I). Registering for a WA Business License and indicating you will hire employees triggers notifications to ESD and L&I; they will contact you to set up employer accounts. You’ll receive account numbers and instructions to file quarterly wage reports and pay required payroll-related taxes/premiums (UI, workers’ comp, Paid Family & Medical Leave, WA Cares where applicable). 7) Ongoing compliance to maintain good standing - Maintain a Registered Agent in WA and keep SOS records updated. File required annual/periodic reports with the Secretary of State (use the CCFS online system). Maintain tax registrations and file returns timely with DOR, and file quarterly employer reports with ESD and L&I when applicable. Keep careful records of Washington‑sourced receipts (including marketplace sales) to monitor nexus thresholds. Practical checklist for a founder expanding into Washington while based elsewhere - Step 1: Analyze activities and sales into WA (include marketplace sales) to determine if you have economic or physical nexus. - Step 2: If you determine you are doing business or have nexus, file a Foreign Registration Statement with the WA Secretary of State (fee $180; attach Certificate of Existence issued within 60 days). Appoint a Washington Registered Agent with a physical WA address. - Step 3: Register with the Department of Revenue (Business Licensing Service / My DOR) to obtain a UBI and tax accounts (sales/use, B&O, withholding/endorsements as relevant). - Step 4: If you hire employees in WA, expect outreach from ESD and L&I; complete employer registrations and set up quarterly reporting. - Step 5: Start collecting sales tax if you exceeded $100,000 in WA-sourced gross receipts (collect starting the first day of the month at least 30 days after the threshold is met). - Step 6: Monitor B&O exposure (gross receipts tax) and apply any credits where eligible. - Step 7: Keep annual filings and registered agent info current and consult a WA‑licensed attorney or CPA for legal/tax determinations. Why this matters (practical note) - Washington’s combination of economic nexus rules and a gross‑receipts (B&O) tax means remote sellers can owe both sales tax collection and state tax on gross receipts once thresholds are met. Marketplace activity can accelerate nexus, and employer presence (even a single employee) creates immediate registration and payroll obligations. Addressing registration, tax, and employer obligations proactively avoids back taxes, penalties, and interest. Next recommended actions for you (founders / LLC owners) - Gather your Washington‑sourced sales data (include marketplace sales), and run a 12‑month lookback to see if you’ve exceeded $100,000. - If you meet or will meet the threshold, start the DOR registration and plan to register as a foreign entity with SOS (if you are "doing business" per legal standard). - If you expect to have employees in Washington, start the WA Business License Application before payroll begins so ESD and L&I can issue accounts and instructions. - Consult a CPA or attorney for entity choice, state‑level tax planning, and to confirm whether foreign qualification is required under WA law. If you want, I can: - Produce a one-page WA compliance checklist tailored to your business activities (sales channels, employees, inventory). - Draft step‑by‑step filing instructions and a timeline (including links and required documents) for foreign registration and DOR licensing. Citations and verbatim excerpts (sources used)