San Juan County Business Licenses and Vacation Rental Permits: Friday Harbor, Eastsound and Lopez Village

If you plan to run a business or a vacation rental in San Juan County, you will deal with at least two layers of government. The state issues the core business license, and either the town or the county adds local requirements. Where your property sits determines much of the local layer. Friday Harbor is an incorporated town. Eastsound and Lopez Village are unincorporated, so county rules apply and there is no town license to buy.

This guide covers the state license, the local requirements for each community, the vacation rental permit rules that changed in 2025, and the island logistics that affect planning. It is informational content, not legal or tax advice. Rules and fees change, so confirm every figure with the agency named before you pay or file.

Skip the paperwork

Let a pro file your Washington business for you

Filing in Washington means state registration, an EIN, and a registered agent. These two services handle all of it, and here's our honest take on when to use each.

Top pick · Best value

Northwest Registered Agent

$39 + state fee

Keeps your home address private
Free registered agent for year one
Real US-based support, no upsell maze

Best for: most Washington founders who want privacy and value without the markup.

Form my Washington LLC →

BetterLegal

Fastest setup · premium

Business filed in about 2 business days
Bundles your EIN + operating agreement
One streamlined, hands-off checkout

Best for: founders who need it done fast with everything bundled.

Set up with BetterLegal →

Affiliate partners: we may earn a commission at no extra cost to you. Pricing is set by each provider and may change.

Start with the State: The Business Licensing Service

Washington has no corporate income tax and no personal income tax on wages. Most businesses instead pay the state business and occupation (B&O) tax, a gross receipts tax with no deduction for labor, materials or other costs. The state business license is handled by the Business Licensing Service (BLS) inside the Washington State Department of Revenue. One Business License Application issues your 9-digit Unified Business Identifier (UBI), registers any trade name, and adds city and state endorsements.

You need a state business license if any of the following apply:

You operate under a name other than your full legal name.
You sell anything subject to sales tax. A paid overnight stay is generally a taxable sale, so most vacation rentals fall here.
Your gross income is $12,000 or more per year.
You plan to hire employees within 90 days.
You owe any tax or fee to the Department of Revenue.

Corporations, LLCs, LLPs and partnerships must file with the Washington Secretary of State, Corporations and Charities Division before submitting the Business License Application. Sole proprietors and general partnerships do not file with the Secretary of State. If you form an LLC, you must also designate a registered agent with a physical street address in Washington. PO Boxes and private mailbox addresses are not accepted.

State Fees at a Glance

Item	Fee	Where it is filed
Business License Application processing fee (opening a business)	$50	Department of Revenue, BLS
Business License Application processing fee (adding a trade name to an existing business)	$10	Department of Revenue, BLS
Trade name registration	$5 per trade name	Department of Revenue, BLS
LLC Certificate of Formation with Initial Report	$180	Secretary of State, CCFS
LLC or corporation annual report	$70, or $95 if late	Secretary of State, CCFS
Expedited Secretary of State service	$100 per entity	Secretary of State

Note the order of operations. If you form an LLC, file the Certificate of Formation first, then apply for the state business license. The annual report is due by the last day of the month in which the LLC was originally formed, every year, and it may be filed up to 180 days early.

Trade Names: Register Them With the State

If your rental is marketed as something like "Orcas Cove Cabins" rather than your legal name, you must register that name. Trade names are registered through the BLS at the Department of Revenue. They are not registered with the Secretary of State or the county. The Department of Revenue trade name page explains the process.

Processing Times: Plan Ahead

Online applications generally take about 10 business days. If the application needs city or state endorsements approved, add 2 to 3 weeks. Mailed applications can take up to six weeks. For a rental that needs to accept bookings by a set date, submit early and do not promise dates to guests until the license is in hand.

Sales Tax on Your Rental

The state sales tax rate is 6.5%. Combined rates in San Juan County were 8.65% in Friday Harbor and 8.35% in unincorporated areas for the first quarter of 2026. Eastsound and Lopez Village are unincorporated, so use the 8.35% figure as a starting point, then confirm the current rate with the Department of Revenue before you set your nightly rate or your booking platform settings. Rates can change, and a platform that collects tax for you may still need your registration details.

Friday Harbor: Town Endorsements and No City B&O

Friday Harbor is the one community in this guide with a town business license layer. Per the Department of Revenue listing as of October 26, 2026:

A Friday Harbor business license costs $50.
A Friday Harbor home business costs $50.
Non-resident businesses with gross income of $4,000 or less in the city owe no fee.
Friday Harbor does not levy a city B&O tax, so your state B&O filing is the only B&O obligation to track.

These are endorsements on the statewide application, so you do not file a separate town form. Check the Department of Revenue business licensing page to confirm which endorsements your address and activity require before you submit.

Eastsound and Lopez Village: County Rules Apply

Eastsound on Orcas Island and Lopez Village on Lopez Island are unincorporated. You will not find a town business license for either community, and the state application does not add a city endorsement for them. That does not mean you have no local obligations. Your county requirements still apply, and you should confirm them directly with San Juan County before you open.

Two county-level items matter most for most readers:

Vacation rental permits. Covered in the next section.
Food permits. If you serve or sell food, county food permits are issued under San Juan County Code (SJCC) Chapter 8.04. Contact the county health department for current fees and to learn how the permit year works.

Vacation Rental Permits: The 2025 Changes

San Juan County changed its vacation rental rules in 2025 under Ordinance 10-2025, which added SJCC 18.40.275. The county's vacation rental page says no new vacation rental applications are currently being accepted except as Section 5 of the ordinance allows, and that pre-existing rentals in Eastsound and Lopez Village had to apply for a provisional use permit by June 25, 2026. Beyond that, the rules that apply to you depend on your property, your location and when you began renting. Do not rely on older advice or on what a neighbor told you. Contact San Juan County Community Development and ask for written answers to these questions:

What permit does my property need under SJCC 18.40.275 right now?
If my rental was operating before June 25, 2025, and I did not apply by the June 25, 2026 deadline, what are my options?
What are the current permit fees?
Is there a cap on the number of permits, or a lottery to receive one?
Does the permit apply to my island community, and does the answer differ between Friday Harbor and the unincorporated areas?

If you were renting before June 25, 2025, keep records that show it: booking history, platform statements, past tax filings and any lodging correspondence. Those records are the evidence you will need if the deadline or grandfathering rules apply to you.

State Endorsements That May Apply to Rentals

The Department of Revenue issues the UBI and state endorsements in one application. Vacation rental operators most often need to confirm two things:

Sales tax registration. Covered by the state application if your rental charges guests.
Lodging licensing. The state lists the Department of Health (DOH) among the agencies that license lodging. Ask San Juan County whether a DOH lodging license applies to your property before you assume it does not.

If you sell homemade food or specialty products to guests or at local markets, the Washington State Department of Agriculture (WSDA) licenses cottage food operations, processors and related activities. Confirm which category fits your product before you start selling.

Island Logistics That Affect Your Plan

Most of San Juan County is reached by Washington State Ferries, and that shapes your costs and timelines. Plan for the following:

Inspections and contractors. Build ferry schedules into any work that requires a county inspector, electrician, plumber or septic specialist. A missed sailing can cost a full day.
Supplies. Stock up on linens, cleaning supplies, and repair parts. Shipping to island addresses can add time and cost.
Vehicle and guest access. Tell guests about ferry reservations, sailing times and the driving distance from the terminal to your property.
Staffing. Cleaning and property management often depend on people who live on the same island. Factor in the cost of travel between islands if you use off-island help.

Your Step-by-Step Checklist

Decide your legal structure. Sole proprietors skip the Secretary of State. LLCs and corporations file with CCFS first.
If you form an LLC, file the Certificate of Formation ($180) and name a registered agent with a Washington street address.
Choose your business name. If it differs from your legal name, plan to register a trade name ($5 per name).
Find your community: Friday Harbor (town rules apply) or Eastsound and Lopez Village (county rules apply).
Submit the Business License Application through the Department of Revenue. Budget $50 for a new business, or $10 when adding a trade name to an existing business.
Confirm Friday Harbor endorsements ($50 for a business license, $50 for a home business) if your property is in town.
Contact San Juan County Community Development about the SJCC 18.40.275 vacation rental permit, and ask what your options are if you were renting before June 25, 2025 and did not apply by the June 25, 2026 deadline.
Contact the county health department if you serve food.
Plan for 10 business days online, and 2 to 3 weeks longer if endorsements need approval.
Calendar your LLC annual report ($70) for the last day of your formation month each year.

Official Resources

For San Juan County permits, use the county's official website and look for Community Development and the health department. Ask for the current fee schedule in writing.

When to Bring in a Professional

A simple sole proprietorship with one rental may need only the state application and a county permit check. Bring in a CPA if you have multiple entities, employees, or questions about B&O and sales tax treatment of short-term stays. Talk to an attorney about your lease or ownership structure, liability insurance, and how the 2025 ordinance applies to your property. The Washington SBDC offers free and low-cost advising that can help you organize the paperwork before you meet with those professionals.

Disclaimer: This article is informational content, not legal or tax advice. Fees, deadlines and county rules change. Confirm all details with the Washington Department of Revenue, the Secretary of State, San Juan County Community Development and the county health department, and consult a qualified attorney or CPA for your situation.