Washington compliance for private consultants

Washington

compliance for private consultants — A practical, step-by-step guide Excerpt: Actionable compliance guidance for consultants, freelancers, and LLC founders working in Washington State — registration, taxes, employer obligations, local licenses, and practical checklist.

Introduction If you consult privately in Washington (remote or in-state clients), make compliance part of your launch and ongoing operations. Washington has no personal income tax, but it does have state-level business registration, annual filings, a gross-receipts B&O tax, payroll-related employer obligations, and specific rules about independent contractors.

This guide explains what to do, when, and where to file. 1) Quick overview: what most private consultants must consider - Business registration / UBI (Unified Business Identifier) and state business license (Department of Revenue).

You need a UBI if you meet common tests (e.g., gross income ≥ $12,000/yr, hire employees, use a trade name, or need to collect sales tax). - Choose entity: sole proprietor vs. Washington LLC or other.

If you form an LLC, file a Certificate of Formation with the Secretary of State and designate a registered agent. - Annual Secretary of State filings (Annual Report) to keep good standing. - State taxes: B&O tax (gross receipts), possible sales tax on certain services, and local (city) B&O taxes in some cities. - If you hire or work with contractors, understand Washington’s strict independent contractor tests; workers’ compensation and unemployment tax can apply. - Employer programs: workers’ compensation (L&I), Unemployment Insurance (ESD), and Paid Family & Medical Leave (PFML). - Professional licensing: some consulting (e.g., engineering, architecture, legal, accounting) may require separate professional licenses. - FinCEN/BOI: be aware of federal BOI reporting developments (as of March 2025 FinCEN exempted domestic U.S. companies from BOI reporting by interim rule; foreign reporting companies still face deadlines).

See FinCEN guidance. 2) Step-by-step setup and first filings A. Decide entity and form (if using an LLC) - File Certificate of Formation with Washington Secretary of State (online via the Corporations & Charities Filing System).

Fee: typically $180 for formation (online), expedited options available; every LLC must have a registered agent with a Washington street address. - After filing you will receive (or already have) a 9-digit UBI used by state agencies.

B. Register for a state business license / UBI - Use the Department of Revenue Business License Application (BLA) to apply.

The UBI registers you with several agencies and triggers tax and employer accounts if applicable. The Business License Application process may take ~10 business days (longer if city/state endorsements required); fees vary (see DOR fee guidance). - Common triggers for registration: gross income ≥ $12,000/year; hiring employees; selling taxable services or goods; doing business under a trade name; needing city/county endorsements.

C. Federal EIN (if needed) - Get an EIN (IRS) if you will hire employees or the entity structure requires it, or if you prefer not to use your SSN for business banking. 3) State tax obligations — what consultants typically face A.

Business & Occupation (B&O) tax (gross receipts) - Professional or personal service income typically falls under the Service & Other Activities classification. The basic Service & Other Activities rate historically was 1.5% but Washington moved to tiered rates effective Oct 1, 2025 and into 2026: (less than $1M prior-year taxable income = 1.5%; $1M–$4,999,999.99 = 1.75%; $5M+ = 2.1%).

Confirm your classification and use DOR guidance to report and pay. - B&O is a gross receipts tax — no deductions for expenses. B.

Sales tax and services - Many professional consulting services are not retail sales subject to sales tax, but certain services (e.g., some advertising services, web hosting/digital services, sign installation, and others listed by DOR) may be taxable.

Check DOR’s list of services newly subject to retail sales tax to confirm whether your particular service is taxable. C.

Local (city) taxes and B&O - Some Washington cities impose their own B&O taxes or business license taxes (check city rules where you operate or have customers). FileLocal and city finance pages list local requirements and thresholds; local rates and thresholds vary. 4) Employer obligations (only if you hire employees or certain contractors) A.

Workers’ compensation (L&I) - Washington presumes workers are covered by workers’ compensation unless they meet narrow independent contractor exceptions. A federal 1099 is not sufficient to show an independent contractor exemption.

If you have covered workers, you must register for a workers’ compensation account and pay premiums. Use L&I resources and the Independent Contractor Guide and eLearning to evaluate coverage.

B. Unemployment Insurance (ESD) - If you have employees, ESD requires employer registration and unemployment insurance contributions.

Generally, if you must provide workers’ compensation premiums, you will owe unemployment taxes. C.

Paid Family & Medical Leave (PFML) - Most employers with WA employees must register for Paid Family & Medical Leave, report wages, and remit premiums (employee/employer share rules apply). There are voluntary options for some self-employed persons.

D. New hire reporting and payroll filings - Report new hires to the Department of Social and Health Services.

Also file quarterly wage/hour reports with L&I and ESD as required.

Title: Washington compliance for private consultants — A practical, step-by-step guide Excerpt: Actionable compliance guidance for consultants, freelancers, and LLC founders working in Washington State — registration, taxes, employer obligations, local licenses, and practical checklist.

Introduction If you consult privately in Washington (remote or in-state clients), make compliance part of your launch and ongoing operations. Washington has no personal income tax, but it does have state-level business registration, annual filings, a gross-receipts B&O tax, payroll-related employer obligations, and specific rules about independent contractors.

This guide explains what to do, when, and where to file. 1) Quick overview: what most private consultants must consider - Business registration / UBI (Unified Business Identifier) and state business license (Department of Revenue).

You need a UBI if you meet common tests (e.g., gross income ≥ $12,000/yr, hire employees, use a trade name, or need to collect sales tax).

- FinCEN/BOI: be aware of federal BOI reporting developments (as of March 2025 FinCEN exempted domestic U.S. companies from BOI reporting by interim rule; foreign reporting companies still face deadlines).

See FinCEN guidance. 2) Step-by-step setup and first filings A. Decide entity and form (if using an LLC) - File Certificate of Formation with Washington Secretary of State (online via the Corporations & Charities Filing System).

Fee: typically $180 for formation (online), expedited options available; every LLC must have a registered agent with a Washington street address. - After filing you will receive (or already have) a 9-digit UBI used by state agencies.

B. Register for a state business license / UBI - Use the Department of Revenue Business License Application (BLA) to apply.

The UBI registers you with several agencies and triggers tax and employer accounts if applicable. The Business License Application process may take ~10 business days (longer if city/state endorsements required); fees vary (see DOR fee guidance). - Common triggers for registration: gross income ≥ $12,000/year; hiring employees; selling taxable services or goods; doing business under a trade name; needing city/county endorsements.

C. Federal EIN (if needed)

3) State tax obligations — what consultants typically face A. Business & Occupation (B&O) tax (gross receipts)

1.5% but Washington moved to tiered rates effective Oct 1, 2025 and into 2026: (less than $1M prior-year taxable income = 1.5%; $1M–$4,999,999.99 = 1.75%; $5M+ = 2.1%). Confirm your classification and use DOR guidance to report and pay.

4) Employer obligations (only if you hire employees or certain contractors) A. Workers’ compensation (L&I) - Washington presumes workers are covered by workers’ compensation unless they meet narrow independent contractor exceptions.

A federal 1099 is not sufficient to show an independent contractor exemption. If you have covered workers, you must register for a workers’ compensation account and pay premiums.

Use L&I resources and the Independent Contractor Guide and eLearning to evaluate coverage. B.

Unemployment Insurance (ESD)

• Choose entity: sole proprietor vs. Washington LLC or other. If you form an LLC, file a Certificate of Formation with the Secretary of State and designate a registered agent.
• Annual Secretary of State filings (Annual Report) to keep good standing.
• State taxes: B&O tax (gross receipts), possible sales tax on certain services, and local (city) B&O taxes in some cities.
• If you hire or work with contractors, understand Washington’s strict independent contractor tests; workers’ compensation and unemployment tax can apply.
• Employer programs: workers’ compensation (L&I), Unemployment Insurance (ESD), and Paid Family & Medical Leave (PFML).
• Professional licensing: some consulting (e.g., engineering, architecture, legal, accounting) may require separate professional licenses.
• Get an EIN (IRS) if you will hire employees or the entity structure requires it, or if you prefer not to use your SSN for business banking.
• Professional or personal service income typically falls under the Service & Other Activities classification. The basic Service & Other Activities rate historically was
• B&O is a gross receipts tax — no deductions for expenses. B. Sales tax and services
• Many professional consulting services are not retail sales subject to sales tax, but certain services (e.g., some advertising services, web hosting/digital services, sign installation, and others listed by DOR) may be taxable. Check DOR’s list of services newly subject to retail sales tax to confirm whether your particular service is taxable. C. Local (city) taxes and B&O
• Some Washington cities impose their own B&O taxes or business license taxes (check city rules where you operate or have customers). FileLocal and city finance pages list local requirements and thresholds; local rates and thresholds vary.
• If you have employees, ESD requires employer registration and unemployment insurance contributions. Generally, if you must provide workers’ compensation premiums, you will owe unemployment taxes. C. Paid Family & Medical Leave (PFML)
• Most employers with WA employees must register for Paid Family & Medical Leave, report wages, and remit premiums (employee/employer share rules apply). There are voluntary options for some self-employed persons. D. New hire reporting and payroll filings
• Report new hires to the Department of Social and Health Services. Also file quarterly wage/hour reports with L&I and ESD as required.

Independent contractor rules — important for consultants who hire or are hired - Washington’s tests focus on “personal labor,” supervision/direction (control), whether the worker has an independent business, separate books, UBI and registrations, and other factors. Use L&I’s six-part tests and the Independent Contractor Guide to document your contractor relationships. Misclassification can lead to assessments for unpaid premiums, taxes, penalties, and interest.

Annual maintenance and deadlines - Secretary of State annual report

due annually by the end of the registration anniversary month (you may file up to 180 days early). Fee for profit entities (including LLCs): $70; late/delinquency fees apply. - Business License Application: no general renewal required at state level, but maintain registrations and report changes. - Tax filing / B&O returns: follow DOR filing schedule assigned when you register — monthly, quarterly, or annually depending on volumes and thresholds. 7) FinCEN BOI / Corporate Transparency Act (CTA) - The BOI reporting landscape changed in 2025: FinCEN issued an interim final rule (Mar 26, 2025) that exempted entities created in the U.S. (domestic reporting companies) from BOI reporting; it kept reporting requirements for certain foreign reporting companies and set short deadlines for those foreign entities. If you are a U.S.-created LLC, current FinCEN guidance indicates domestic companies are exempt under the interim rule—stay updated on FinCEN updates because this area has changed and may be finalized.

Local business licenses and city rules - Check city-level license requirements where you operate or maintain a presence (Seattle, Tacoma, Bellevue, etc.). Cities may require registration/fees and can impose local business license taxes or B&O taxes. Use FileLocal and city business licensing pages to register locally.

Professional licensing and exceptions - If your “consulting” is in a licensed profession (e.g., attorneys, CPAs, engineers, architects, real estate brokers, certain healthcare consultants), obtain and maintain the relevant professional license(s) before offering services.

Practical checklist for a Washington private consultant (starter) Immediate / formation steps

- Choose entity type; form LLC with WA SOS if desired (file Certificate of Formation online; fee ~ $180). Designate a registered agent with a physical WA address. - Apply for your WA Business License / UBI with DOR (Business License Application). Provide hire/employer intent if applicable. - Obtain an EIN from the IRS (if you hire or prefer separate federal tax ID). - Open a separate business bank account; adopt basic bookkeeping. Operational / tax compliance: - Determine B&O classification and set up DOR filing frequency; register to collect sales tax if your services are taxable. - If you will have employees, register for L&I (workers’ compensation) and ESD (unemployment) and PFML. - If you use contractors, document independent-contractor evidence and test each contract. - Confirm whether local city licenses or local B&O taxes apply and register locally. Annual / ongoing tasks: - File WA Secretary of State Annual Report each year by your anniversary month ($70 for profit entities). - File B&O and sales tax returns on your assigned schedule; pay premiums for L&I, unemployment, PFML quarterly or per agency rules. - Keep professional licenses current if applicable. - Monitor FinCEN BOI updates (if you thought BOI applied, check FinCEN for current rules). 11) Practical filing links and agency contact pages (start here) - Washington Department of Revenue — Apply for a Business License / UBI: https://dor.wa.gov/open-business/apply-business-license - Washington DOR — Business & Occupation (B&O) tax overview: https://dor.wa.gov/taxes-rates/business-occupation-tax - DOR — B&O tax classifications (Service & Other Activities rate info): https://dor.wa.gov/taxes-rates/business-occupation-tax/business-occupation-tax-classifications - DOR — Services newly subject to retail sales tax (check if your service is taxed): https://dor.wa.gov/taxes-rates/retail-sales-tax/services-newly-subject-retail-sales-tax - Washington Secretary of State — Start a Domestic WA LLC online (Certificate of Formation instructions & fees): https://www.sos.wa.gov/corporations-charities/business-entities/online-filing-instructions/start-domestic-wa-limited-liability-company-llc-online and SOS filing portal https://ccfs.sos.wa.gov/ - WA SOS — Annual Report filing & fee info: https://www.sos.wa.gov/corporations-charities/business-entities/file-annual-report-multiple-entity-types-online - Washington L&I — Independent contractor guidance and workers’ compensation rules: https://lni.wa.gov/insurance/insurance-requirements/independent-contractors/ and L&I guide PDF https://www.lni.wa.gov/forms-publications/F101-063-000.pdf - DOR — Hiring employees guidance (how DOR notifies L&I and ESD when you indicate you will hire): https://dor.wa.gov/manage-business/grow-business/hiring-employees - Paid Family & Medical Leave (employers info and toolkits): https://paidleave.wa.gov/employers/ - FinCEN BOI page (Corporate Transparency Act / BOI): https://www.fincen.gov/boi and Federal Register interim final rule: https://www.federalregister.gov/documents/2025/03/26/2025-05199/beneficial-ownership-information-reporting-requirement-revision-and-deadline-extension - Local city/local B&O info summary (example resource listing local tax rates): https://wacities.org/docs/default-source/resources/bando-taxes/botaxrates.pdf 12) Notes, cautions and next steps - Washington’s rules on independent contractors and workers’ compensation are strict; document how each contractor meets exemption tests. 1099 forms alone won’t protect you. - B&O is a gross receipts tax — budgeting for the tax is important because it applies to gross revenue before deductions. - Sales-tax treatment of services has changed; check DOR lists because some digital/advertising and other services are now taxable. - FinCEN BOI rules changed in 2025; most U.S.-formed companies were exempted by an interim rule, but you should verify your circumstance and monitor FinCEN for updates. Conclusion For Washington consultants the main compliance pillars are: establish the right business entity and UBI; register with DOR and determine B&O/sales tax obligations; understand employer obligations if you hire or supervise workers; maintain Secretary of State filings and local city licenses; and check whether your consulting requires a professional license. Use the agency links above to register, file, and keep records. If your situation is complex (significant payroll, cross-state operations, or professional licensing), consult a Washington-licensed attorney or CPA. If you’d like, I can: - Convert this into a full blog post formatted for your site (with meta description and H2/H3 headings) using your title and slug; or - Produce a printable compliance checklist and calendar of filing deadlines tailored to your expected revenues and whether you’ll hire employees.