Tacoma Business License: $37 to $2,000 by Income, 0.4% Services B&O, Residential Business and Food Truck Rules
Tacoma Business License: $37 to $2,000 by Income, 0.4% Services B&O, Residential Business and Food Truck Rules
A Tacoma business license is really two layers of paperwork. The first is Washington's statewide Business License Application, run by the Department of Revenue's Business Licensing Service (BLS). It issues your 9-digit Unified Business Identifier (UBI). Tacoma is not on the BLS city endorsement list; it runs its own city license through FileLocal. The second layer is the city's own fee, which is set by your worldwide gross income, not by your industry. Washington has 39 counties and 281 incorporated cities and towns, and each city sets its own rules, so the Tacoma fee applies only if your business operates within the city's rules and you confirm the tier with the city.
Disclaimer: This article is informational content, not legal or tax advice. Fees, income thresholds and rules change. Confirm every figure with the agency named before you rely on it, and talk to a qualified attorney or CPA if your structure, payroll or sales are complex.
What You Need Before You Start
Gather these items first so you can finish the application in one sitting:
- Your full legal name, date of birth, and either a Social Security number or an IRS Employer Identification Number (EIN). You can apply for an EIN directly from the IRS at no charge.
- Your business name and Tacoma address, plus a mailing address.
- Your estimated gross income for the year from all sources, because the city tier depends on it.
- A plain description of what you sell or do, so the correct B&O classification can be assigned.
- If you formed an LLC or corporation, your Secretary of State filing number and the name of your Washington registered agent. The agent must have a physical street address in Washington, since PO Boxes and private mailbox addresses are not accepted.
- A trade name registration, if you will operate under any name other than your full legal name.
- Payment for the $50 state processing fee and any endorsement fees.
Step 1: Decide Whether You Need a Secretary of State Filing
Your structure determines whether the Secretary of State is involved. Sole proprietors and general partnerships do not file with the Secretary of State. If you form an LLC, you file a Certificate of Formation with Initial Report through the Corporations and Charities Filing System (CCFS) at ccfs.sos.wa.gov. Corporations file Articles of Incorporation with Initial Report. Each of these filings costs $180.
LLC names must include Limited Liability Company, Limited Liability Co., L.L.C., or LLC, and must be distinguishable from every other business name on record. If you need time to prepare, a name reservation costs $30 and lasts 180 days.
Put the recurring LLC deadline on your calendar. The annual report costs $70 and is due by the last day of the month in which the LLC was originally formed, every year. You can file up to 180 days early. A late filing carries a delinquency fee, for a total of $95. Corporations follow the same annual report schedule and fee. Check the Secretary of State Corporations and Charities Division page for current details.
Step 2: Register Your Trade Name Through the BLS
If you do business as something other than your legal name, register a trade name. Trade names are not registered with the Secretary of State or the county. You register them through the Business Licensing Service using the Business License Application, described on the Department of Revenue trade name page. Each trade name costs $5, plus the non-refundable BLS processing fee: $50 to open or reopen a business, or $10 when the filing is for another purpose, such as adding a trade name to an existing business.
Step 3: Find Your Tacoma Fee Tier by Gross Income
Tacoma prices its license on worldwide gross income, not only sales made inside the city. The amounts below were listed on tacoma.gov as of July 30, 2025. Check the city's Tax and License pages for any 2026 changes before you pay.
| Worldwide gross income | Tacoma license fee |
|---|---|
| Nonprofit, or under $12,000 | $37 |
| $12,000 to $250,000 | $190 |
| $250,001 to $1,000,000 | $435 |
| $1,000,001 to $5,000,000 | $1,500 |
| Over $5 million | $2,000 |
Tacoma lists these amounts for 2024 through 2026. Confirm which tier fits your income with Tax and License before you pay.
Out-of-city businesses have a carve-out. Starting January 1, 2026, out-of-city firms with less than $4,000 in gross income in Tacoma do not need to register. Measure that $4,000 on your Tacoma gross, and confirm the rule with the city if you are close to the line.
Your gross income also decides whether a state license is required. The state requires a Business License Application at $12,000 or more in gross income a year, but other triggers apply at any income, such as selling anything subject to sales tax or hiring employees within 90 days.
Step 4: Estimate Your B&O Tax
Washington has no corporate income tax and no personal income tax on wages. Its main business tax is the state business and occupation (B&O) tax, a gross receipts tax with no deduction for labor, materials or other costs. About 54 cities add their own B&O tax, and Tacoma is one of them. The city tax is administered locally, not by the Department of Revenue.
| Activity | Tacoma local B&O rate |
|---|---|
| Manufacturing | 0.11% |
| Retail | 0.153% |
| Services | 0.4% (listed as grandfathered) |
| Wholesale | 0.102% |
The services rate appears on the Association of Washington Cities 2026 list as grandfathered, so do not assume it applies to your business without confirming. The Association of Washington Cities list also shows a $250,000 tax threshold for Tacoma. Ask Tax and License whether the 0.4% rate applies to your activity and how that threshold works. As a rough illustration only, $500,000 in services gross receipts at 0.4% equals $2,000 in city B&O for the year, before any threshold or credit. Your actual tax depends on how the city and the state classify your income.
Step 5: Submit the Business License Application
Submit the Business License Application through the Department of Revenue's online licensing system. Corporations, LLCs, LLPs and partnerships must file with the Secretary of State before submitting the application. Sole proprietors can apply without a Secretary of State filing.
- Confirm your triggers. You need the state license if you need city, county or state endorsements, operate under a name other than your full legal name, plan to hire employees within 90 days, sell anything subject to sales tax, have $12,000 or more in gross income a year, owe a tax or fee to the Department of Revenue, or meet nexus thresholds.
- Register with Tacoma separately. Tacoma is a FileLocal city, so its city license is not a BLS endorsement. Choose the gross income tier from Step 3 and confirm the filing steps with Tacoma Tax and License.
- Pay the processing fee. The $50 processing fee is non-refundable. Endorsement fees are separate, so confirm their current amounts on the application.
- Track the status. Keep your confirmation number and any correspondence from the BLS or the city.
Residential Business Rules
Running a business from your home in Tacoma falls into one of two categories. A Residential Business requires a one-time $100 fee and an agreement involving Environmental Services, Planning, and Tax and License. A Residential Business 2 requires a conditional use permit under Tacoma Municipal Code (TMC) 6B.130. A conditional use permit is a separate land-use approval, so allow time for it before you buy equipment or invite customers to your home. Confirm with Planning which category fits your activity before you apply.
Food Truck and Mobile Food Rules
Treat the following as a checklist to confirm with the city and the health district serving Pierce County, not as a list of settled fees:
- Tacoma business license in the tier that matches your gross income. Tacoma also lists a separate Food Truck Vendor license at $225.
- Health district permit for your food operation. Ask about the permit fee, plan review and inspection schedule before you buy the truck.
- B&O classification. Food sales may fall under retail or services, and the rates differ (0.153% for retail, 0.4% for services). Ask Tax and License which classification applies.
- Sales tax. The state rate is 6.5%, and the combined rate in Tacoma is 10.3% (Q1 2026). Confirm which of your sales are taxable.
- Location. Confirm with Planning where a food truck may operate and whether any zoning approval is needed.
Short-Term Rentals and Other Special Licenses
Short-term rentals need the city business license. If you rent three or more rooms, you also need a transient accommodation license. Tacoma's short-term rental page does not name the issuing agency or the fee for that second license, so confirm both with Tax and License before you list the property.
Other Tacoma fees include $250 for a pawnbroker license and $100 for a for-hire vehicle. Tacoma has no local minimum wage on the L&I 2026 list, but state wage rules still apply.
Many trades also need a state license on top of the city license. L&I registers contractors and licenses electrical and plumbing work, DOL licenses real estate, cosmetology, notaries, security and tow operators, and DOH licenses health professions, home care and lodging. Check the agency that governs your trade before you open.
Common Mistakes to Avoid
- Choosing a tier from last year's income instead of realistic projected gross, or forgetting that the measure is worldwide gross income.
- Skipping the state application because the city fee is only $37. The state requirement applies at $12,000 or more, and other triggers apply at any income.
- Using a PO Box or private mailbox as your registered agent address.
- Operating under a name you have not registered as a trade name.
- Assuming a Secretary of State filing covers the Tacoma license. It does not.
- Assuming a sole proprietor must file with the Secretary of State. Sole proprietors and general partnerships do not.
- Missing the LLC annual report deadline, which adds a delinquency fee for a total of $95.
- Assuming the 0.4% services B&O rate applies without confirming the grandfathered status.
What Results to Expect
Timing depends on the agency's workload and on whether endorsements need review. Based on the published figures, you can reasonably plan for the following:
- An online BLS application generally takes about 10 business days. Plan for two to three weeks longer if city or state endorsements need approval.
- A mailed application can take up to six weeks.
- An LLC filing through CCFS is generally processed within three business days when you pay the expedited fee of $100 per entity. The Secretary of State does not publish a standard turnaround for online filings.
Following these steps may help you open a Tacoma business in a more predictable way, but they do not guarantee approval, a specific processing date or a particular tax result. Keep a record of what you paid, when you filed and which agency confirmed each figure.
When to Talk to a Professional
Consult a qualified attorney about entity choice, contracts, and zoning disputes, and a CPA about B&O classification, multi-state income, and payroll. The Washington Small Business Development Center at wsbdc.org is another place to start your research. This article is informational, not legal or tax advice.