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Business Climate

 

Doing Business in Washington State

For new businesses locating in the State of Washington, contact must be made with the Secretary of State’s office to file for Articles of Incorporation.  The Secretary of State’s office will issue a UBI number after which the business will apply for a Master Business License for the Department of Licensing.  Application for the Master Business License registers the business with the Departments of Revenue, Licensing, Labor and Industries, Employment Security, Secretary of State and Washing State Department of Commerce for one-stop coordination through the state’s permitting processes.

 

Click here for more information on starting a business in Washington state

 

Wage Rate

The 2011 Washington minimum wage is $8.67.  Washington's minimum wage applies to workers in both agriculture and non-agricultural jobs, although 14- and 15-year-olds may be paid 85% of the minimum wage ($7.37).

 

Corporate and Personal Income Tax

The state of Washington is one of only seven states that do not levy a corporate, unitary, or personal income tax.  Washington State does not tax inventory and there is no tax on interest, dividends, or capital gains.

 

Businesses operating in Washington State are subject to three major taxes-either administered or overseen by the Department of Revenue.  These taxes are:

 

  • Business and Occupation Tax (B&O)
  • Sales/Use Tax
  • Property Tax

 

Workers' Compensation and Unemployment Insurance

All businesses hiring employees are required to register for workers' compensation and unemployment insurance. By completing the Master Business Application, you will be registered for workers' compensation at the Department of labor and Industries and unemployment insurance at the Employment Security Department. 
 

After filing your application, the Department of Labor and Industries and the Employment Security Department will send you information about employee quarterly report forms.

 

Click here for more information on Workers' Compensation Insurance
 

Unemployment Insurance Tax

0.35-6.2% of the first $35,700 of an employee's salary. The average tax rate for last quarter of 2009 was 1.7%; however, the rates may vary depending on the employers rate class.

 

Industrial Insurance

Workers' compensation (industrial insurance) provides no-fault industrial insurance benefits to most workers and employer's in Washington who are injured in the course of their employment or develop an occupational disease as a result of their required work activities.

Washington is the only state with workers' compensation tax rates based on the hours worked, rather than per $100 of wages paid. This means there is not an inflationary increase built into the system when wages rise. Rates are based on business classification and experience. Insurance is not paid for hours the worker is off the job, including sick leave, vacation or holiday hours, and leaves of absence.
 
Workers' compensation pays for approved medical, hospital and related services due to workplace injuries and/or provides compensation for those who are temporarily unable to work full-time. Employers must provide coverage for their employees; in return, employers normally cannot be sued for damages when a work-related injury or illness occurs.
 

Employers purchase coverage through the Department of Labor and Industries. The agency manages and pays benefits out of an insurance pool called the Washington State Fund, financed by premiums paid by employees and employers. 

 

Tax Incentives

Washington State incentives can reduce the tax burden for locating or expanding a business.  For more information on how Washington State incentives can benefit your company please contact Bryson Bailey, Director of Business Recruitment.