Washington compliance support for rapid growth

Executive summary Washington offers a business-friendly environment (no state personal or corporate income tax) but requires careful attention to state and local compliance as you scale. Growing businesses must register with both the Washington Secretary of State (for entity formation and annual reports) and the Department of Revenue (for a Unified Business Identifier / business license and excise tax accounts).

On top of state formation and tax requirements, employers must manage workers’ compensation, unemployment insurance, and Paid Family & Medical Leave reporting and premium remittance. Recent federal BOI/FinCEN rule changes (March 26, 2025) also affect beneficial ownership reporting obligations — see below.

Executive summary Washington offers a business-friendly environment (no state personal or corporate income tax) but requires careful attention to state and local compliance as you scale. Growing businesses must register with both the Washington Secretary of State (for entity formation and annual reports) and the Department of Revenue (for a Unified Business Identifier / business license and excise tax accounts).

On top of state formation and tax requirements, employers must manage workers’ compensation, unemployment insurance, and Paid Family & Medical Leave reporting and premium remittance. Recent federal BOI/FinCEN rule changes (March 26, 2025) also affect beneficial ownership reporting obligations — see below.

Formation & early-stage filings (what to do at launch) - Register your corporate entity with the Washington Secretary of State (Corporations & Charities Division) using the Corporations and Charities Filing System (CCFS). The SOS provides forms, online filing, and guidance for LLCs and foreign qualifications. Keep a registered agent on file with a Washington physical address and be ready to update contact details promptly. - Action

File your Certificate of Formation (or foreign registration) and designate a registered agent through the SOS CCFS; retain filing confirmations and UBI/formation documents. - Register for a Washington business license with the Department of Revenue Business Licensing Service (BLS) to receive a Unified Business Identifier (UBI). The UBI links your accounts across DOR, L&I and ESD and is required for tax and employer accounts. - Action: Use DOR’s Business Licensing Wizard and file the Business License Application to set up state tax and payroll accounts.

Taxes & state excise obligations (B&O, sales/use) - Washington’s Business & Occupation (B&O) tax is a gross receipts tax assessed on the value of products, gross proceeds, or gross income — there are no deductions for labor/materials. Classification-specific rates apply; use DOR’s B&O rates and classification pages to determine your category. - Action

Register with DOR and determine your B&O classification; set up filing frequency (monthly, quarterly, annual) based on revenue and DOR guidance. - Business license / tax registration thresholds: - DOR guidance: You must register if your gross income is $12,000 per year or more, if you plan to hire employees, or if you are required to collect sales tax or obtain endorsements. - Out-of-state nexus: Since Jan. 1, 2020, businesses meet reporting/collection obligations if they have physical presence, are organized or commercially domiciled in WA, or have more than $100,000 in combined gross receipts sourced to WA. - Action: If gross receipts approach thresholds or you have in-state activity, register early to avoid penalties. - Filing cadence: monthly returns due on the 25th of the following month; quarterly returns due by the end of the month following the quarter; annual returns follow the schedule DOR publishes. 4) Payroll, labor & employer obligations - Workers’ compensation (Department of Labor & Industries, L&I): Washington employers purchase coverage through L&I (private coverage is not permitted). Employers submit quarterly premium reports and pay premiums based on risk classifications and hours worked. Employers should obtain an L&I account early and confirm risk class assignments. - Action: Create an L&I account, determine your risk class, and set up quarterly reporting. - Unemployment insurance (Employment Security Department, ESD): Employers register for UI (SUTA) accounts; quarterly reports and payments are required. ESD provides employer tax rates, taxable wage base details, and guidance for out-of-state employers with Washington employees. - Action: Open your ESD employer account when you hire; file quarterly reports on time to avoid penalties. - Paid Family & Medical Leave (PaidLeave WA / ESD): Employers must file quarterly wage and hours reports and remit premiums each quarter — even if there is no payroll for the quarter. Premiums are shared between employees and most employers; employers may withhold the employee portion or pay part/all of the premium themselves. Employers with employees in multiple states must follow rules for each state where employees work. - Action: Sign up for reporting, integrate Paid Leave remittance into payroll workflows, and complete quarterly filings by April 30, July 31, October 31 and January 31. - Washington Cares Fund (long-term care): Employers collect premiums from employees starting July 1, 2023, unless an employee is exempt; verify exemption handling and recordkeeping obligations. - Wage & hour rules: Washington’s minimum wage and sick leave laws are enforced by L&I; several local jurisdictions (Seattle, SeaTac, Tukwila, Bellingham, etc.) may have higher minimum wages or additional rules — check local city rules where employees work. - Action: Use the state Minimum Wage Tool and review L&I guidance for pay statements, sick leave policy implementation, overtime and recordkeeping.

Licenses, permits & industry-specific requirements - Use DOR’s Business Licensing Wizard and business.wa.gov’s Regulatory Handbook to identify federal, state, and local permits (health, environmental, liquor, food service, contractors’ registrations, professional licenses). Many permits require endorsements or city/county approvals. City endorsements (e.g., Seattle) may be required depending on location. - Action

Build a permit checklist using the Business Licensing Wizard and map renewal dates into a compliance calendar.

Beneficial Ownership Information (BOI) / FinCEN update - Critical federal update

FinCEN published an interim final rule (March 26, 2025) revising the Corporate Transparency Act implementation so that entities formed in the United States (domestic reporting companies) are exempt from BOI reporting; the revised definition applies reporting obligations only to certain foreign-formed entities registered to do business in the U.S. (reporting companies). Confirm your BOI obligations directly on FinCEN’s BOI page and monitor guidance, because deadlines and definitions were updated in 2025. - Action: Check FinCEN’s BOI page for your entity’s filing obligation. If you previously filed BOI or planned to, verify whether your company now falls under the exemption or remains a reporting company (e.g., foreign entities registered in WA). 7) Key deadlines & recurring items checklist (practical compliance calendar) - SOS: File annual/periodic reports per SOS schedule to maintain entity good standing (file online via CCFS). Keep registered agent information current. - DOR: Business license/application (UBI) at startup; excise tax returns: monthly (25th following month), quarterly (last day of month following quarter), annual timelines per DOR. - L&I / ESD / PaidLeave: Quarterly reporting due dates for payroll-related filings — April 30, July 31, October 31, January 31 (for L&I, ESD SUTA and Paid Leave reports). - FinCEN BOI: Follow FinCEN guidance for deadlines if your entity is a reporting company (noting 2025 rule revisions).

Common audit triggers & pitfalls for growth-stage companies - Late or missing DOR registrations (UBI) when revenue crosses thresholds. • Incorrect B&O classification or late excise returns. • Failure to register for employer accounts (L&I/ESD/PaidLeave) prior to hiring. • Not maintaining a registered agent or missing SOS annual reports. • Misclassifying workers (employees vs. independent contractors). • Failing to collect or remit local endorsements (city/county endorsements).

Practical options for compliance support (recommended stack) - Registered agent service

provides WA physical address and notice handling (privacy + reliability). Recommended for out-of-state founders. - Accounting & tax: CPA or tax firm familiar with WA B&O tax and nexus rules. Set up monthly bookkeeping and quarterly excise returns early. - Payroll provider: use a modern payroll provider (Gusto, ADP, Paychex, or specialized regional payroll firms) that supports L&I, ESD, Paid Leave, and withholding across jurisdictions. - Employment counsel: consult employment attorneys for wage/hour, classification, and benefits compliance as you scale. - Compliance software & calendar: adopt a deadline/calendar tool and a document manager for SOS filings, insurance policies, and license documents. - State resources: Small Business Guide (business.wa.gov), Business Licensing Wizard (DOR), and agency employer portals (L&I, ESD, paidleave.wa.gov) for direct assistance.

Suggested next steps for the reader (checklist) - Day 1–7

Confirm entity registration with SOS; appoint/confirm a Washington registered agent; file for UBI via DOR Business Licensing Service. Apply for EIN with IRS. - Week 1–4: Register for L&I and ESD employer accounts (if hiring), assess B&O tax classification and anticipated filing cadence, implement payroll provider and withholdings for Paid Leave and WA Cares (if applicable). - Month 1–3: Create a compliance calendar with SOS annual report date, DOR filing cadence, quarterly payroll reporting and premium remittance dates, permit renewals, and insurance renewals. - Ongoing: Retain a CPA and employment counsel; perform quarterly internal compliance checks before state filings.