Washington compliance for founders without tax residency

I researched Washington state compliance for founders without U.S. tax residency (non‑resident/foreign founders) who form or operate businesses with connections to Washington. Below is a concise, actionable summary of the legal and tax compliance topics founders need to address, followed by a practical checklist and authoritative links.Summary of findings (high level)- Entity formation/registration: If a non‑U.S. founder forms an entity outside Washington but will "do business" in Washington (physical presence, employees, property, or meeting economic thresholds), the business must register as a foreign entity with the Washington Secretary of State (Foreign Registration Statement).

Registered agent in WA is required; Certificate of Existence/Good Standing from home jurisdiction required; filing fee applies.- State tax registration and B&O/Sales tax: Washington has no personal income tax, but businesses operating in Washington are generally subject to the state excise system: Business & Occupation (B&O) tax on gross receipts and retail sales tax where applicable.

Out‑of‑state (remote) sellers or marketplace sellers must register if they meet economic thresholds (more than $100,000 in combined gross receipts sourced to WA in the current or prior year, or are organized/commercially domiciled in WA).

Marketplaces/facilitators have special rules; facilitators may collect sales tax on behalf of sellers but sellers may still have B&O reporting obligations.- Apportionment: For apportionable activities (income sourced to multiple states/countries), Washington uses a receipts‑based apportionment formula and has specific rules for allocating income to Washington; eligibility for apportionment depends on being taxable in another jurisdiction or meeting nexus/threshold criteria.- Employer obligations: Employers with employees performing work in WA must register with the Employment Security Department (ESD) for unemployment taxes, register with L&I for workers' compensation, and comply with Washington Paid Family & Medical Leave (PFML) rules (employer/employee contribution and reporting).

Even if founders are non‑resident for tax purposes, employer obligations apply if services are performed in WA. Washington has no state income tax withholding, but federal withholding and IRS rules for nonresident employees apply.- Federal withholding and foreign owners: Partnerships (including LLCs taxed as partnerships) that have effectively connected income allocable to foreign partners must withhold under IRC §1446; partnerships must file Forms 8804/8805 and provide information to foreign partners.

Foreign partners should obtain U.S. TINs (ITIN or SSN) to claim credits; partnerships should encourage partners to obtain TINs.

Other federal withholding/reporting (e.g., Form 1042/1042‑S, FIRPTA) may apply depending on the activity.- Banking and TINs: Foreign owners and entities typically need an EIN (Form SS‑4) for the business for tax reporting and to open US bank accounts; individual nonresident owners may need an ITIN (Form W‑7) for tax filings and credits.

Some banks have additional KYC and onboarding requirements.Practical compliance checklist for non‑US founders with Washington connections1. Determine whether you are "doing business" in WA and whether your activities create nexus (physical presence, employees, property, or economic threshold > $100,000 in WA receipts).

Consult WA DOR "Out of state businesses reporting thresholds and nexus" and Secretary of State guidance.

I researched Washington state compliance for founders without U.S. tax residency (non‑resident/foreign founders) who form or operate businesses with connections to Washington. Below is a concise, actionable summary of the legal and tax compliance topics founders need to address, followed by a practical checklist and authoritative links.Summary of findings (high level)- Entity formation/registration: If a non‑U.S. founder forms an entity outside Washington but will "do business" in Washington (physical presence, employees, property, or meeting economic thresholds), the business must register as a foreign entity with the Washington Secretary of State (Foreign Registration Statement).

Registered agent in WA is required; Certificate of Existence/Good Standing from home jurisdiction required; filing fee applies.- State tax registration and B&O/Sales tax: Washington has no personal income tax, but businesses operating in Washington are generally subject to the state excise system: Business & Occupation (B&O) tax on gross receipts and retail sales tax where applicable.

Out‑of‑state (remote) sellers or marketplace sellers must register if they meet economic thresholds (more than $100,000 in combined gross receipts sourced to WA in the current or prior year, or are organized/commercially domiciled in WA).

Marketplaces/facilitators have special rules; facilitators may collect sales tax on behalf of sellers but sellers may still have B&O reporting obligations.- Apportionment: For apportionable activities (income sourced to multiple states/countries), Washington uses a receipts‑based apportionment formula and has specific rules for allocating income to Washington; eligibility for apportionment depends on being taxable in another jurisdiction or meeting nexus/threshold criteria.- Employer obligations: Employers with employees performing work in WA must register with the Employment Security Department (ESD) for unemployment taxes, register with L&I for workers' compensation, and comply with Washington Paid Family & Medical Leave (PFML) rules (employer/employee contribution and reporting).

Even if founders are non‑resident for tax purposes, employer obligations apply if services are performed in WA. Washington has no state income tax withholding, but federal withholding and IRS rules for nonresident employees apply.- Federal withholding and foreign owners: Partnerships (including LLCs taxed as partnerships) that have effectively connected income allocable to foreign partners must withhold under IRC §1446; partnerships must file Forms 8804/8805 and provide information to foreign partners.

Foreign partners should obtain U.S. TINs (ITIN or SSN) to claim credits; partnerships should encourage partners to obtain TINs.

Other federal withholding/reporting (e.g., Form 1042/1042‑S, FIRPTA) may apply depending on the activity.- Banking and TINs: Foreign owners and entities typically need an EIN (Form SS‑4) for the business for tax reporting and to open US bank accounts; individual nonresident owners may need an ITIN (Form W‑7) for tax filings and credits.

Some banks have additional KYC and onboarding requirements.Practical compliance checklist for non‑US founders with Washington connections1. Determine whether you are "doing business" in WA and whether your activities create nexus (physical presence, employees, property, or economic threshold > $100,000 in WA receipts).

Consult WA DOR "Out of state businesses reporting thresholds and nexus" and Secretary of State guidance.

If "doing business" in WA

register with Secretary of State (foreign registration) and designate a WA registered agent; obtain any required Certificate of Existence/Good Standing from home jurisdiction.

Apply for a Washington Business License/UBI and register with WA Dept. of Revenue (My DOR) to report B&O and sales/use taxes where applicable. Remote sellers/maketplace sellers must register if thresholds are met.

Review B&O tax classifications and apportionment rules; if taxable in multiple jurisdictions, apply WA apportionment rules when filing.

If you will have employees or contractors in WA

register with ESD for unemployment insurance; register with L&I for workers' compensation; comply with PFML requirements and withhold/contribute as required. Confirm classification of workers vs contractors under WA rules.6. For LLCs taxed as partnerships or partnerships with foreign partners: comply with IRC §1446 partnership withholding, file Forms 8804/8805 as required, and ensure partners obtain TINs (ITIN/SSN) so withholding credits can be claimed.

Obtain an EIN for the business. Nonresident individuals who must file US tax returns should apply for ITINs if they are ineligible for SSNs.

If selling goods/services to WA consumers

verify sales tax obligations, economic nexus thresholds, and marketplace facilitator rules; register to collect sales tax if required.

Keep records and use binding rulings or professional counsel for uncertain nexus or apportionment questions; contact WA DOR for rulings when needed.Recommended next steps and resources- Confirm whether your business activities meet "doing business" criteria with WA Secretary of State guidance and WA DOR nexus thresholds. If in doubt, get a legal tax opinion or request a binding ruling from WA DOR.- Register

Secretary of State (foreign registration), WA Dept. of Revenue (Business License Application / My DOR) and ESD/L&I if you will have WA employees.- Consult U.S. tax counsel or CPA to manage federal withholding responsibilities (IRC §1446, Form 8804/8805, Form 1042/1042‑S) and to obtain ITINs/EINs for the entity and owners.Authoritative links and selected verbatim excerpts (supporting sources)1) WA Secretary of State — Register a Foreign LLC: https://www.sos.wa.gov/corporations-charities/business-entities/online-filing-instructions/register-foreign-non-wa-limited-liability-company-llc-online Excerpt: "Purpose: A Foreign Registration Statement is used by business entity types, whose home state is a different state or country for the purpose of registering to do business in Washington State... Filing Fee: $180 ... Registered Agent: All businesses must designate a Registered Agent in Washington State, as required by RCW 23.95.415."2) WA Secretary of State — Register a Foreign (Non‑WA) Business: https://www.sos.wa.gov/corporations-charities/business-entities/start-or-register-business/register-foreign-non-wa-business Excerpt: "The Secretary of State cannot evaluate whether a business qualifies as 'doing business' in our State... The law does specify activities not constituting doing business in RCW 23.95.520... Step 2: Obtain a Certificate from your 'home jurisdiction'... Step 3: Register your Foreign (Non‑WA) Business..."3) WA Dept. of Revenue — Out Of State Businesses Reporting Thresholds And Nexus: https://dor.wa.gov/education/industry-guides/out-state-businesses-reporting-thresholds-and-nexus Excerpt: "Starting Jan. 1, 2020, a business must register to report B&O tax and collect/submit applicable sales tax, if the business meets any of the following thresholds in the current or prior year: Has physical presence nexus in Washington; Has more than $100,000 in combined gross receipts sourced or attributed to Washington; Is organized or commercially domiciled in Washington." 4) WA Dept. of Revenue — Remote Sellers: https://dor.wa.gov/taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field/remote-sellers Excerpt: "Remote seller definition: You are a remote seller if you do not have a physical presence nexus in Washington... Starting Jan. 1, 2020, remote sellers must register to report B&O tax and collect/submit applicable sales tax, if the seller meets either of the following thresholds... Has more than $100,000 in combined gross receipts sourced or attributed to Washington..."

WA Dept. of Revenue — Marketplace Sellers / Facilitators

https://dor.wa.gov/taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field/marketplace-sellers and https://dor.wa.gov/taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field/marketplace-facilitators Excerpt: "If you make all of your retail sales through a marketplace facilitator, you do not need to collect and submit retail sales tax if you have proof that the facilitator is doing so on your behalf. You will still file and pay your B&O and other taxes if you meet a registration threshold... Marketplace facilitators must provide each of their marketplace sellers with access to information regarding gross Washington sales made on their behalf during the previous month."

WA Dept. of Revenue — Apportionment – The Basics

https://dor.wa.gov/education/industry-guides/apportionment/apportionment-basics Excerpt: "For business and occupation (B&O) tax purposes, apportionment refers to the use of a formula to allocate a business’ income to the appropriate taxing jurisdictions... If you are a business that is taxable in Washington and another state, you must use our apportionment formula to determine how much of your apportionable income is subject to B&O tax in Washington."

IRS — Partnership withholding

https://www.irs.gov/individuals/international-taxpayers/partnership-withholding Excerpt: "Partnerships, including partnerships with foreign partners, have many filing and reporting requirements... partnerships could be responsible for other tax issues, such as FIRPTA withholding, NRA withholding, and partnership withholding under sections 1446(a) and 1446(f) of the Internal Revenue Code (IRC)."8) IRS — Helpful hints for partnerships with foreign partners: https://www.irs.gov/individuals/international-taxpayers/helpful-hints-for-partnerships-with-foreign-partners Excerpt: "A foreign or domestic partnership (other than a publicly traded partnership) that has effectively connected taxable income allocable to a foreign partner must pay a withholding tax under IRC section 1446 equal to the applicable percentage of the effectively connected taxable income that is allocable to its foreign partners... A partnership must pay the withholding tax for a foreign partner even if the partnership does not have a U.S. TIN for that partner."9) IRS — Aliens employed in the U.S.: https://www.irs.gov/individuals/international-taxpayers/aliens-employed-in-the-us Excerpt: "Any employer who hires aliens (non‑U.S. citizens or residents) to perform services within the United States must follow these general procedures with respect to the reporting and withholding of federal income taxes... For income tax withholding purposes, treat resident aliens the same as U.S. Citizens... For nonresident aliens, special withholding rules apply as described in Publication 515 and Publication 15."

WA Dept. of Revenue — My DOR / Business License Application

https://dor.wa.gov/open-business/apply-business-license and https://secure.dor.wa.gov/ Excerpt: "To register, file a Business License Application. This application will register your business with the Department of Revenue and other state agencies. You will be issued a Unified Business Identifier (UBI)/Account ID when the application is processed."

WA Secretary of State — Foreign Entity Registration Filings & Forms

https://www.sos.wa.gov/corporations-charities/business-entities/foreign-entity-registration-filings-instructions-and-forms Excerpt: "Foreign Entity Registration, Filings, Instructions, and Forms... Select 'Start a Business' and then the desired business entity type for both Domestic (WA) and Foreign (Non‑WA) filing information, including forms and online instructions."12) WA Employment Security Department — Unemployment taxes (employer obligations): https://esd.wa.gov/employer-requirements/unemployment-taxes Excerpt: "Learn about unemployment taxes that employers pay in Washington. How to pay, how to avoid penalties, how to dispute a tax rate, and more."(Additional WA pages to consult for employer compliance: L&I workers' compensation pages and PFML pages; these were consulted during searches and should be reviewed directly.)Reasoning / steps taken- Performed targeted searches across official Washington state sites (sos.wa.gov, dor.wa.gov, esd.wa.gov) and federal sites (irs.gov) for rules that specifically affect non‑U.S. resident founders. Prioritized state primary sources and federal tax guidance for withholding on foreign partners. Searched for: foreign registration requirements, out‑of‑state and remote seller rules, B&O tax and apportionment, marketplace facilitator rules, employer taxes (ESD), workers' compensation (L&I), PFML, and IRS rules (IRC 1446, ITIN/EIN, withholding for nonresident employees). - Collected and compressed the most relevant authoritative language and practical compliance steps.If you want, I can now: A) Draft a full blog post (blog_content) and newsletter content (newsletter_content) tailored to US business owners/LLC founders that expands the summary above into a long‑form article with step‑by‑step guidance, checklists, and resource links; orB) Produce a short practical checklist or one‑page compliance guide you can include in the newsletter; orC) Prepare templated next‑step items (forms to file, sample emails to registered agent, checklist for accountants) that founders can use immediately.Tell me which deliverable you want next (full blog post, short checklist, or templates) and I will produce it using the research above.