How to get a business license in Washington State

Most businesses operating in Washington, including sole proprietors, need a state business license from the Department of Revenue. You can apply for a Washington state business license online by completing a Business License Application, and you can add city and state endorsements in the same filing. When your application is processed, your business receives a Unified Business Identifier (UBI) number. A Washington business license is separate from a Secretary of State registration, which comes first for LLCs and corporations.

What is a Washington state business license?

A Washington state business license is a state-level general license issued by the Department of Revenue’s Business Licensing Service. Previously known as a Master Business License, this license registers a business with the state, the Department of Labor and Industries, and the Employment Security Department in a single application.

Upon approval for a license, your business receives a Unified Business Identifier (UBI), a nine-digit number used across Washington state agencies. The number is printed on your business license, and you need it when filing taxes and making changes to your business.

Washington business licensing has three layers:

• The state license.
• City, county, and state endorsements.
• Separate professional licenses from the Department of Licensing (DOL).

Do you need a business license in Washington state?

If you have a business in Washington state, you most likely need to get a state business license. Some businesses also need city or county licenses. Here are the Washington state business license requirements, according to the Department of Revenue:

• Your business requires city, county, or state endorsements.
• You’re planning on doing business using a name other than your full legal name.
• You plan to hire employees within the next 90 days.
• You sell a product or service that requires the collection of sales tax.
• Your gross income is at least $12,000 per year (cities can set a lower income threshold).
• Your business is required to pay taxes or fees to the Department of Revenue.
• You’re a buyer or processor of specialty wood products.
• You have an out-of-state business that meets Washington’s nexus threshold reporting requirements.

Does an LLC need a business license in Washington state?

Yes, but the LLC needs to register with the Secretary of State first, and then file a Business License Application. LLC formation in Washington doesn’t license the business.

How much can you make in Washington without a business license?

You can make any amount below $12,000 of gross yearly income in Washington without a state business license. However, there are other conditions that trigger business licensing requirements regardless of income.

City endorsements and local licenses

Most cities in Washington have general businesses licenses that are added to the state license as city endorsements. You apply for city endorsements inside the same Business License Application you submit for a state license, and each city charges its own endorsement fee.

Some cities, including Seattle and Tacoma, license directly instead of through a city endorsement. You apply through the city itself separately from your state license application. Certain annual city license fees are based on annual revenue, with Seattle and Tacoma both having sliding fee scales based on how much a business earns.

Washington businesses in unincorporated areas may need a county endorsement. Requirements depend on the county and the type of business.

Professional licenses and state endorsements

The Washington State Department of Licensing (DOL) handles professional licenses for a range of regulated professions and industries, including architecture, cosmetology, real estate, and transportation. Visit the DOL professional licenses page to search licenses by keyword and category.

Some professions are licensed by other agencies. Contractors must register with the Washington State Department of Labor & Industries (L&I), and healthcare professionals are licensed by the Department of Health.

Certain types of businesses involving regulated activities require state endorsements, which are added through the Business License Application. Cannabis, liquor, lottery, and scrap metal businesses are a few examples. You can see a full list on the DOR’s state endorsements page.

How to get a business license in Washington State, step by step

Follow these steps to get a Washington state business license.

1. Register with the Secretary of State if needed

If you’re starting an LLC, a corporation, a limited partnership, or a limited liability partnership, you’ll need to file with the Washington Secretary of State first, before applying for a business license. The process is available online, and the Secretary of State provides online filing instructions.

After the Secretary of State approves your business, you can apply for an employer identification number (EIN) from the IRS. It’s free to apply, and you can do it online.

2. Run the Department of Revenue’s Business Licensing Wizard

The Business Licensing Wizard is an online tool that asks for information about your business. It then provides a list of agencies to contact, endorsements you’ll need, and business license tips. Save the list of endorsements, as you’ll need to add them on your application.

3. File the Business License Application

The Business License Application asks for:

• Type of business entity
• UBI if already issued by the Secretary of State
• EIN (you can use your Social Security number if you’re a sole proprietor)
• Owner names and Social Security numbers
• Business address
• Employee hiring plans within the next 90 days
• Trade names
• Workers’ compensation elections

You’ll also add trade names and city endorsements in this application.

To apply, either create an account in the My DOR system and submit the application there or mail your application. Processing time is about 10 business days for online applications, and possibly an additional two to three weeks if you have city or state endorsements. If you mail your application, it can take up to six weeks to process.

4. Apply directly for required city and professional licenses

If your city doesn’t have a city endorsement, check if it has its own general license that you need to apply for directly. Review and apply for any professional licenses you need. Most licenses are available through the DOL, but some are managed by other agencies.

5. Set the annual renewal

Your Washington business license, as well as its city and state endorsements, must be renewed every year. The expiration date is printed on your license, and you can renew up to two months before. The Department of Revenue’s Business Licensing Service sends a reminder one month before expiration. Keep track of your license’s expiration date and make sure to renew it by then.

How much does a Washington State business license cost?

The processing fee for Washington’s Business License Application depends on what the application includes. The base fee to open or reopen a business is $50, and each trade name you register during the initial application costs $5. If you file a separate application later to add a trade name, the cost is $10. The annual renewal processing fee is $5.

Each city, county, and state endorsement has its own fee. You can find fees through the DOR’s endorsements page. Business formation with the Secretary of State, if needed, also carries its own fee.

Renewing a Washington state business license

You must renew your Washington state business license annually through the Department of Revenue’s Business Licensing Service. Your license and all endorsements on the license share the same expiration date, and you renew them together.

Here’s how to renew your license and endorsements online:

• Log in to My DOR with your Secure Access Washington (SAW) user ID and password.
• On the Business License panel, select Renew Business License.
• Review your business information and answer the renewal questions.
• Complete the requested information for any endorsements you’re renewing.
• Pay the required fees. The annual renewal fee is $5 per location, while endorsement fees vary.

You can complete the renewal up to two months before your license expires. The Department of Revenue sends a renewal notice one month before expiration. Keep in mind that you still need to renew your license even if you don’t receive the notice.

Make sure to renew your license on time, as there are penalties for operating on an expired license. The Department of Revenue charges a late fee of half the endorsement fee or $150, whichever is lower. You may qualify for a fee waiver if you haven’t renewed late in the last 24 months. Some agencies charge their own fees and may not offer waivers. You’d also be doing business on an expired license, which could result in fines or other penalties.

If you have an LLC or corporation, the Secretary of State requires an annual report, which is a separate obligation.

Why licensing matters for financing and business credit

In addition to being a legal requirement, licensing is instrumental in qualifying for financing and building business credit. When you apply for business loans, lenders can ask for proof of licensing to confirm that your business is legitimate and legally authorized to operate. Vendors may also check your license when setting up financing, like a net-30 account.

Your UBI number is often required during financing applications, as well. A UBI is especially important because it’s how a Washington business is identified across state agencies and in tax filings.

A licensed business is part of the same legitimacy foundation as business credit. Business credit bureaus build a profile for your business using its name, address, and unique identifiers, so consistent registration information can ensure your business has an accurate file. Licensing can also help with getting approved for the loans and vendor accounts that establish your business credit history.

Nav is not a lender or a credit bureau. Credit information is provided by third-party sources.

The bottom line

Washington has a convenient business licensing process, since it licenses at the state level through one application. Endorsements, which you apply for inside that application, handle most city licensing, although some businesses will need to apply for city or county licensing directly. Once the business is set up, Nav can help with building credit and qualifying for financing.

Frequently asked questions