LLC Annual Report and Tax Filing Requirements in Washington

If you want to start and operate a Washington limited liability company (LLC), you'll need to prepare and file various documents with the state. You'll need to file an annual report and pay business taxes applicable to your LLC. This article covers the most important ongoing reporting and state tax filing requirements for Washington LLCs.

Washington LLC Annual Report

Washington requires LLCs to file an annual report with the Secretary of State (SOS). You can file your annual report online using the Washington Corporations and Charities Filing System. You can either create an account to file your report or use the express annual report option, which doesn't require a login.

The annual report is due every year by the last day of the month when your business was formed. For example, if you formed your LLC on December 17, then your annual report would be due the next year on December 31. As of 2023, the filing fee for a Washington annual report is $60.

In addition to your annual report, you must file an initial report with the SOS. Your initial report must be filed within 120 days of the date you filed to create your LLC. As of 2023, the filing fee for your initial report is $10.

State Business Taxes in Washington

For federal and state tax purposes, LLCs are considered pass-through tax entities. The LLC's income passes through to the owners, who pay taxes on their share of the income. By default, an LLC is taxed as a partnership, a type of pass-through tax entity. However, the LLC owners can elect to have their LLC taxed as a corporation.

No state income tax. Washington is one of only a very few states that doesn't have a personal income tax or a corporation income tax. Consequently, for most LLCs, including those that have elected to be taxed as corporations, no state income taxes are due. Moreover, because Washington also doesn't have a personal income tax, LLC members generally will owe no state tax on income they earn from a Washington LLC.

Business and occupation (B&O) tax. While Washington doesn't have an income tax, it does impose a B&O tax. This tax applies to the gross receipts of most businesses, including LLCs. The B&O tax rate for a business is based on that business's classification. Examples of key classifications include retailing, wholesaling, manufacturing, and service and other activities. To pay this tax, you must register your business with the Department of Revenue (DOR). After you register, you'll file monthly or quarterly returns. For more information, including specific rates and classifications, see the business and occupation tax section of the DOR website.

Washington Employer Taxes

If your LLC has employees or you plan to have employees, you'll need to pay employer taxes. The federal government requires employers to pay certain taxes, such as Social Security and Medicare taxes. Washington also has tax requirements for employers.

No withholding of employee wages. Most states require employers to withhold part of an employee's wages for taxes. Typically, employers will withhold a certain percentage of an employee's pay and pass that on as a tax to the government. However, Washington doesn't have a personal income tax. Therefore, the state doesn't require employers to withhold and pay this tax.

Unemployment insurance (UI) tax. Washington does require employers to pay a state UI tax to the state's Employment Security Department (ESD). You can register for these taxes using the state's Employer Account Management Services (EAMS) system, which is accessed through SecureAccess Washington. Tax and wage reports are due quarterly and can be submitted through EAMS. The ESD has additional information available on its unemployment taxes webpage.

Washington Sales and Use Tax

If your LLC will sell taxable goods and services to customers in Washington, you'll need to collect and pay sales tax. You can register with the DOR to pay this tax through My DOR or through the Business Licensing Wizard. On a periodic basis—either monthly, quarterly, or annually—you'll file sales tax returns (called a "consumer use tax return") with the DOR.

In addition to state sales and use tax, you might be responsible for reporting and paying sales and use tax to your city or county. Make sure you check with your local taxing authorities for your reporting responsibilities.

LLC Registration in Other States

If you plan to do business outside of Washington, then you might need to register in those states where you'll do business. Most states require companies that do business within their state to register as a foreign (out-of-state) company. You should check the state's laws for qualifying as a foreign business.

For more, see our state guide to qualifying to do business outside your state.