Washington Business License in 2026: Who Needs One, Fees, Endorsements and B&O Tax

Washington runs one of the simplest licensing systems in the country: a single application to the Department of Revenue gets you a state business license, a tax account and, in most cities, the local license too. This guide is for sole proprietors, LLC owners and out-of-state companies starting work in Washington. It explains who needs a license, what each fee is, which endorsements apply, and how B&O tax works once you are registered. Fees and rates were checked on dor.wa.gov in October 2026.

Quick answer

A Washington business license is issued by the Department of Revenue's Business Licensing Service through your My DOR account. Opening a new business costs a $50 processing fee plus any state or city endorsement fees, and approval takes about 10 business days online.

• Required at $12,000+ gross income a year — or at any income if you collect sales tax, hire, use a trade name or need an endorsement

• Trade name registration: $5; most later changes: $10

• Endorsed licenses renew every year for a $5 processing fee plus endorsement fees

• Seattle, Tacoma, Bellevue and Everett license through FileLocal, not the state system

• Registration also opens your B&O and sales tax account

What a Washington business license is

The Washington business license is a state registration managed by the Business Licensing Service (BLS), a unit of the Department of Revenue (DOR). When the application is approved you get a Unified Business Identifier, or UBI, a nine-digit number that links your business to the Department of Revenue, the Department of Labor & Industries, the Employment Security Department and the Secretary of State. People also call it a tax registration number or business registration number.

The license document itself lists every endorsement you hold. An endorsement is an add-on permission that a state agency or city requires for a specific activity or location, such as selling cigarettes, employing minors or doing business inside Spokane city limits. More than 400 state and city endorsements can be requested on the same application, which is what makes Washington's system unusual. In most states you would chase each of those permits separately.

Forming an LLC or corporation is a separate step. The Secretary of State registers the entity and assigns a UBI, but that filing does not license you to do business. You still need to file a Business License Application with the Department of Revenue, using the same UBI. Sole proprietors get their UBI directly from the business license application.

Who needs a Washington business license

You must file a Business License Application if any one of these applies to you:

• your gross income from the business is $12,000 a year or more;
• you sell goods or services that require you to collect sales tax, at any income level;
• you do business under a name other than your full legal name;
• you plan to hire employees within the next 90 days;
• your activity needs a state or city endorsement;
• you owe any tax or fee to the Department of Revenue, or you buy or process specialty wood products.

The $12,000 test catches freelancers who assume a side business is too small to register. A graphic designer earning $15,000 a year must register even if none of her services are subject to sales tax. A craft seller earning $3,000 a year at weekend markets must also register, because the sales are taxable. In practice, the threshold only exempts very small service businesses working under their own names, with no employees and no city license requirement.

Out-of-state businesses register too when they have nexus in Washington. Remote sellers who exceed the state's economic nexus threshold must collect sales tax and therefore need a license, and service providers with Washington customers may owe B&O tax even without an office in the state. If you are unsure, the Department's Business Licensing Wizard asks a series of questions and lists the registrations your activity needs.

Washington business license fees

The cost has three layers: a non-refundable processing fee for the application, a fee for each endorsement or trade name, and the city license fee where your city takes part in the state system. The processing fee depends on why you are filing.

State tax registration itself is free; the Department lists it at $0 on each endorsement page. That means a sole proprietor opening a home bookkeeping business under her own name, in a city that charges nothing for small businesses, pays just $50 in total.

Worked examples

A dog groomer opening in Olympia as "Paws & Suds" pays the $50 processing fee, $5 for the trade name and Olympia's $30 city license once she expects more than $4,000 a year in the city. Her first-year licensing cost is $85, and each later year costs the $5 renewal processing fee plus the $30 city fee.

A convenience store opening in Spokane with three employees pays the $50 processing fee, a Shopkeeper endorsement of $55 because it sells over-the-counter medicines, a Cigarette Retailer endorsement of $175, Spokane's $131 origination fee and $10 per employee for three employees. That is $441 before any trade name fee or a liquor license from the Liquor and Cannabis Board, which is priced separately. If the store also sells other tobacco and vapor products, applying for all three tobacco endorsements together at one location costs $250 rather than the cigarette fee alone.

Use the startup cost calculator to add these figures to the rest of your launch budget.

How to apply for a Washington business license

Most owners finish the application in 15 to 30 minutes. Have your UBI ready if you have already formed an LLC or corporation with the Secretary of State, along with your EIN, owners' details, business address, opening date and an estimate of yearly income.

Apply through My DOR

1. 1

   Form your entity first (if you are not a sole proprietor)

   File your LLC or corporation with the Washington Secretary of State. You will receive a UBI number that you then use on the business license application.

   How to form an LLC
2. 2

   Get an EIN if you need one

   Sole proprietors with no employees usually do not need one. All other business types must get an EIN from the IRS, whether or not they have staff.

   Get a free EIN
3. 3

   Run the Business Licensing Wizard

   Answer the questions about your activity and location. The wizard lists the state endorsements, city endorsements and other agency registrations that apply to you.

4. 4

   Create a My DOR account and file

   Log in to My DOR, choose to apply for a new business license, add your trade name, endorsements and city licenses, and pay the fees by card or bank transfer.

   Tip: This same account is where you will file B&O and sales tax returns, so use an email you will keep.

   Apply for a business license
5. 5

   Receive your license and post it

   Online applications take about 10 business days. Endorsements needing agency or city approval add two to three weeks. Some licenses must be posted at the location before you open to the public.

You can file on paper by sending the Business License Application form and payment to Business Licensing Service, PO Box 9034, Olympia, WA 98507-9034, but mail processing can take up to six weeks. You can start using your UBI as soon as it is issued, though businesses whose endorsements must be posted should wait for the printed license before opening their doors.

State endorsements: which businesses need extra approval

Most new businesses need no state endorsement at all. Endorsements apply to regulated activities, and each comes from the agency that oversees that trade. The BLS collects the application and fee and passes it to the agency for approval. A few of the endorsements small businesses meet most often:

Common Washington state endorsements

Endorsement	Who needs it	Fee
Minor Work Permit	Any workplace employing anyone under 18 (Industrial Insurance endorsement also needed)	$0
Shopkeeper	Businesses other than pharmacies selling nonprescription drugs	$55
Cigarette Retailer	Each location selling cigarettes at retail	$175
Liquor (retail and nonretail)	Restaurants, bars, grocery stores; brewers, wineries, distributors	Variable — set by the Liquor and Cannabis Board
Nursery plant seller/installer	Plant sellers and landscapers who install plants or turf	Based on estimated plant sales
Trade name	Anyone operating under a name other than their legal name	$5

Minor Work Permit

Who needs it

Any workplace employing anyone under 18 (Industrial Insurance endorsement also needed)

Fee

$0

Shopkeeper

Who needs it

Businesses other than pharmacies selling nonprescription drugs

Fee

$55

Cigarette Retailer

Who needs it

Each location selling cigarettes at retail

Fee

$175

Liquor (retail and nonretail)

Who needs it

Restaurants, bars, grocery stores; brewers, wineries, distributors

Fee

Variable — set by the Liquor and Cannabis Board

Nursery plant seller/installer

Who needs it

Plant sellers and landscapers who install plants or turf

Fee

Based on estimated plant sales

Trade name

Who needs it

Anyone operating under a name other than their legal name

Fee

$5

Professional licenses are a separate matter. Contractors register with the Department of Labor & Industries, and cosmetologists, real estate brokers and many health professionals hold individual licenses from the Department of Licensing or the Department of Health. Those licenses are in addition to your business license, not a replacement for it.

City business licenses and endorsements

Most Washington cities that license businesses do it through the state system. When you add a city endorsement to your application, the BLS collects the city's fee and issues the endorsement on the same license. If your shop is outside city limits but your crews work inside them, you need that city's non-resident endorsement, which carries no state processing fee when added to an existing location.

City rules vary widely. Olympia charges $30 once gross income in the city passes $4,000 and nothing below that. Kirkland charges nothing under $20,000 of gross income and $100 plus $130 per employee above it, counting full-time equivalents from hours worked. Spokane charges a $131 origination fee plus a per-employee fee that rises with headcount, and sole proprietors and their spouses are not counted as employees. Vancouver charges nothing up to $4,000 of income in the city, a flat fee up to $53,000, and a larger fee plus a per-employee charge above that. Check each city's page on dor.wa.gov before you apply, because the fee can depend on income, headcount or both.

The four largest exceptions are Seattle, Tacoma, Bellevue and Everett. These cities, along with a few others such as Renton and Lake Forest Park, run their own licensing and local B&O tax through a shared portal called FileLocal. If you do business in one of them, you get the state license from DOR and a separate city license through FileLocal. Seattle made a large change for 2026: from January 1, its local B&O tax threshold rose to $2 million and a standard deduction of the same amount was added, so most small businesses that hold a Seattle license no longer owe the city's B&O tax. They still need the license itself.

B&O tax basics for newly licensed businesses

Washington has no personal or corporate income tax. Instead it charges a business and occupation (B&O) tax on gross receipts, with no deduction for wages, rent or the cost of goods. Your business license opens the tax account that this tax runs through, which is why the Department asks for an income estimate when you apply.

The rate depends on what you do. Each activity has a classification, and a business with several activities reports each one separately. These are the main rates in 2026:

The service tiers are new. Under ESSB 2081, from October 1, 2025, businesses with $1 million or more of service income in the prior calendar year pay higher rates, while smaller service businesses stay at 1.5%. Hospitals and some advanced computing businesses keep the lower rate regardless of size.

Small businesses get relief in two ways. The small business B&O credit reduces or wipes out the tax when your liability is low; the Department's system calculates it automatically when you file online, with separate tables for businesses whose income is mostly from services and those whose income is mostly from sales. And if your gross income is under $125,000 a year, you collect no sales tax and owe nothing else to the Department, you can ask for active non-reporting status and stop filing returns while keeping your license active.

Sales tax and the 2025 expansion to services

If you sell goods, you also collect retail sales tax: the 6.5% state rate plus the local rate where the customer receives the goods. Sales tax is collected from customers and held in trust, so it is not a cost to you, but you must report it on the same return as B&O. Businesses that buy goods for resale apply separately for a reseller permit in My DOR, which lets them buy inventory without paying sales tax.

Since October 1, 2025, ESSB 5814 has made several services subject to sales tax for the first time, including advertising services, IT services, custom website development, custom software, live presentations, security and investigation services, and temporary staffing. A freelance web developer who never charged sales tax before now has to. Later legislation effective July 1, 2026 carved out some live presentations and added exemptions for schools and libraries, so check the Department's ESSB 5814 page if you work in one of these fields.

Filing frequency and due dates

The Department sets how often you file from your estimated income. Most activities file annually at $60,000 or less, quarterly at $60,001 to $100,000 and monthly at more than $100,000. Monthly returns are due on the 25th of the following month, quarterly returns at the end of the month after the quarter, and annual returns on April 15. A due date that falls on a weekend or holiday moves to the next business day.

Renewing, changing and closing your license

Your first year with a Washington business license

Day 1

File the Business License Application in My DOR and pay the fees

About 10 business days

UBI and license issued; endorsements needing approval can take 2–3 weeks more

25th of each month

Monthly B&O and sales tax return due for the previous month

End of month after each quarter

Quarterly return due (April 30, July 31, October 31, January 31)

April 15

Annual return due for the previous calendar year

One month before expiry

Renewal reminder for endorsed licenses

Expiration date on license

Renew endorsements or pay the late penalty

A license with no endorsements does not need renewal. Once you hold any state or city endorsement through BLS, the license must be renewed every year by the expiration date printed under your UBI. If you hold several endorsements, each may show its own date. The Department sends a courtesy reminder about a month before expiry, but a missing reminder does not extend the deadline.

Renewal costs the $5 processing fee plus each endorsement's renewal fee, and you can do it online in My DOR. Renewals received after the expiration date are charged a late penalty of half of the endorsement fee, up to $150. If an endorsement lapses, you may have to stop the regulated activity until it is renewed.

Report changes as they happen. A new trade name, a new location, hiring your first employee or adding an activity that needs an endorsement are all filed through My DOR, usually for the $10 processing fee. Changes to an LLC's or corporation's legal name go to the Secretary of State first. If you stop doing business, close your account in My DOR and file the final returns, otherwise the Department will keep expecting returns and may assess penalties for missing ones.

Common mistakes and how to avoid them

The most common mistake is assuming a small service business is exempt when it actually crosses one of the other triggers. Using a business name, hiring a part-time helper or selling a single taxable product brings you in at any income. Register before you start rather than after a city or a customer asks for your UBI.

The second is forgetting the city. A plumber based in unincorporated Pierce County who takes jobs in Kirkland, Olympia and Tacoma needs non-resident endorsements for the first two through BLS and a Tacoma license through FileLocal. Cities check, especially on construction jobs, and penalties for unlicensed work add up quickly.

Third, mixing up the licenses. Your business license does not replace a contractor registration, a professional license or a liquor license, and none of those replace the business license. Fourth, letting an endorsed license lapse: the late penalty can be half the endorsement fee, and you may have to pause the regulated activity until the renewal goes through.

Finally, ignoring the tax side. Once licensed you must file returns on schedule even if you owe nothing, unless you have been placed on active non-reporting status. Many new owners on annual filing miss the April 15 deadline because it is a year away when they register.

Official Washington links

• Apply for a business licenseBusiness Licensing Wizard and My DOR
• Variable processing fees$50 / $10 / $5 fee table
• State endorsementsFees and requirements by activity
• City endorsementsParticipating cities and their fees
• B&O tax classifications and rates
• Filing frequencies and due dates
• Services newly subject to sales taxESSB 5814
• Seattle business taxes (FileLocal)

What to do next

Run the Business Licensing Wizard, form your entity if you need one, and file in My DOR before your first sale or first hire. If you also sell in other states, our business licenses guide explains what to expect elsewhere, and the sales tax calculator helps you price invoices once you are registered.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does a Washington business license cost in 2026?

Opening a new business costs a $50 application processing fee, plus $5 if you register a trade name, plus the fee for each state or city endorsement you need. City fees range from nothing for small businesses in many cities to a few hundred dollars. Adding a location costs $0 in processing, and most other changes cost $10.

Do I need a business license in Washington if I make less than $12,000?

Possibly not. You must register if your gross income is $12,000 a year or more, but you also need a license at any income level if you collect sales tax, use a trade name, plan to hire within 90 days, owe any tax to the Department of Revenue or need a state or city endorsement. Many cities require their own license even for small earnings.

What is a UBI number in Washington?

A Unified Business Identifier is the nine-digit number issued when your Business License Application is approved. It registers you with several state agencies at once and works as your tax registration number. LLCs and corporations receive a UBI when they file with the Secretary of State, but they still need to file a Business License Application with the Department of Revenue to get licensed.

Does a Washington business license expire?

The base state registration does not expire, but any license carrying state or city endorsements must be renewed every year by the expiration date printed under your UBI number. Renewal costs a $5 processing fee plus endorsement fees. Late renewals pay a penalty of half of the endorsement fee, up to $150.

Do I need a separate Seattle business license?

Yes. Seattle, along with Tacoma, Bellevue and Everett, issues its own business license through FileLocal rather than through the state's Business Licensing Service. You still need the state license from the Department of Revenue. From January 1, 2026 Seattle raised its B&O tax threshold to $2 million, so most small businesses no longer owe the city's B&O tax.

How long does it take to get a Washington business license?

Online applications through My DOR take about 10 business days to process. Endorsements that need approval from a city or another state agency can add two to three weeks. Mailed applications can take up to six weeks, so apply online if you are on a deadline.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Apply for a business license — Washington State Department of Revenue · accessed 7 October 2026
2. 2.Variable business license processing fees — Washington State Department of Revenue · accessed 7 October 2026
3. 3.Business licensing and renewals FAQs — Washington State Department of Revenue · accessed 7 October 2026
4. 4.State endorsements (Minor Work Permit, Shopkeeper, Cigarette, Tobacco and Vapor) — Washington State Department of Revenue · accessed 7 October 2026
5. 5.City endorsements (Olympia, Spokane, Kirkland, Vancouver) — Washington State Department of Revenue · accessed 7 October 2026
6. 6.Business & occupation tax classifications — Washington State Department of Revenue · accessed 7 October 2026
7. 7.Service and other activities rate changes (ESSB 2081) — Washington State Department of Revenue · accessed 7 October 2026
8. 8.Small business B&O tax credit — Washington State Department of Revenue · accessed 7 October 2026
9. 9.Filing frequencies & due dates — Washington State Department of Revenue · accessed 7 October 2026
10. 10.Services newly subject to retail sales tax (ESSB 5814) — Washington State Department of Revenue · accessed 7 October 2026
11. 11.Retail sales tax — Washington State Department of Revenue · accessed 7 October 2026
12. 12.Apply, print or appeal your reseller permit — Washington State Department of Revenue · accessed 7 October 2026
13. 13.Business taxes — City of Seattle · accessed 7 October 2026
14. 14.Business Taxes — FileLocal participating cities — City of Lake Forest Park · accessed 7 October 2026