How to Start a Distillery in Washington: $150 Craft License, $2,100 Standard License and the 30% Cocktail Cap

If you want to start a distillery business in Washington, expect a layered process. You need a business entity filed with the Secretary of State, a statewide business license from the Department of Revenue, and a distiller license from the Washington State Liquor and Cannabis Board (LCB). You will also need local approvals and, for most distilleries, a federal permit from the Alcohol and Tobacco Tax and Trade Bureau (TTB). Your license fee depends mostly on your production size and where your raw materials come from. The tasting room rules often shape your revenue plan as much as your production plan does.

This guide covers the steps in the order most founders file them, with the fees and limits you need to plan around.

What You Need Before You Start

Gather these items before you open any application:

• A business name that meets Washington's name rules and is available in the Secretary of State database
• A registered agent with a physical Washington street address (PO Boxes are not accepted)
• A premises you can lease or own, in a location your city or county allows for distilling, and for on-premises alcohol service if you plan a tasting room
• A production plan with estimated annual gallons and a list of raw materials with their sources
• Purchase invoices or other records showing where each raw material was grown, if you want the craft rate
• A federal Employer Identification Number (EIN) from the IRS
• Funds for the state fees listed in the cost summary below
• A food plan for your tasting room, since food offerings are required

Step 1: Pick Your License Tier

Washington sets the distiller license fee by production size, raw material sourcing and product type. The fee schedule is in RCW 66.24.140 (fees set by 2025 c 343). Choose your tier before you finalize your business plan, because the craft rate depends on conditions you must prove.

License type	Who it fits	Fee
Craft distiller	Produces 150,000 gallons or less, with at least half of its raw materials grown in Washington	$150
Fruit or wine distillery	Stills federally licensed as fruit and/or wine distilleries, used solely to make fruit brandy and wine spirits	$300
Standard distiller	Any distiller that does not qualify for the lower tiers	$2,100 a year

The craft rate saves real money, but you must keep proof of Washington sourcing from your first purchase. If you are unsure whether your mash bill or fruit sourcing qualifies, ask the LCB before you apply. Do not assume you qualify and find out during review. Confirm the renewal schedule for each tier with the LCB as well.

Step 2: Form Your Business Entity

Most distilleries form a limited liability company (LLC). You file a Certificate of Formation with Initial Report through the Corporations and Charities Filing System (CCFS) at https://ccfs.sos.wa.gov/. The filing fee is $180. A corporation files Articles of Incorporation with Initial Report at the same $180 fee. Sole proprietors and general partnerships do not file with the Secretary of State.

Your LLC name must include Limited Liability Company, Limited Liability Co., L.L.C. or LLC. It must also be distinguishable from every other business name on record, and it cannot contain words such as bank, banking, banker, trust or cooperative. Under RCW 23.95.305, the name rules are strict, so search the Secretary of State business search before you commit to a brand. If you need time, you can reserve a name for 180 days for $30. Expedited service is $100 per business entity, generally processed within three business days.

Your registered agent must consent to serve, supply an email address and have a physical street address in Washington. Commercial or noncommercial agents are both allowed. There is no fee to change the registered agent or registered office.

Step 3: Get Your UBI and Trade Name Through the Business Licensing Service

The Business Licensing Service (BLS), inside the Washington State Department of Revenue, issues your 9-digit Unified Business Identifier (UBI) and handles trade names and city and state endorsements in one Business License Application. A distillery needs this license. You will sell products subject to sales tax, and you will likely need endorsements. Your LLC must be filed with the Secretary of State before you submit the BLS application.

The processing fee is $50 to open a business. It is non-refundable. If you already have a business and are adding a trade name, the fee is $10. Each trade name you register costs $5. Trade names go through BLS, not the Secretary of State or the county. Online applications take about 10 business days. Add 2 to 3 weeks if city or state endorsements need approval. Mailed applications can take up to six weeks. Apply at dor.wa.gov/open-business/apply-business-license and register your trade name at dor.wa.gov/manage-business/grow-business/register-trade-names.

Step 4: Apply for Your LCB Distiller License

The LCB licenses liquor and issues the distiller license. Start at lcb.wa.gov. Have your entity documents, UBI, premises details, production estimates and ownership information ready. Expect the LCB to request background and ownership disclosures for each principal. Confirm the complete document checklist with the LCB before you submit, because requirements can change.

Your fee depends on the tier you chose in Step 1. If you want off-site tasting rooms, you can operate up to two. Each one costs $2,100 a year under RCW 66.24.146. Budget for those fees separately from the main license.

Separately, most distilleries must register with the TTB before they produce spirits for sale. The federal permit is not a state license, and it does not replace the LCB license. Check current federal requirements at ttb.gov. TTB also regulates alcohol labels and advertising, so review your label design with the TTB rules before printing.

The LCB does not publish a processing time in the information this guide relies on. Ask the LCB for current timelines, and plan for your application to take a while, especially if local jurisdictions need to weigh in.

Step 5: Clear Local Zoning, Building and Health Requirements

Washington has 39 counties and 281 incorporated cities and towns. Your location determines which local rules apply, so check with the city or county where your premises will sit. Confirm that distilling is an allowed use in your zone. Many industrial and mixed-use zones permit it, but a tasting room may need separate approval. Ask about conditional use permits and whether the local government has a comment process for liquor applications.

Check with your city or county building department about occupancy, ventilation and fire code requirements. Stills and alcohol storage carry real fire risk, so talk to your insurance provider early. If you plan to serve food or samples, check with your local health district about the permit you need. Many cities also levy their own business and occupation (B&O) tax, and about 54 cities do, so ask whether your city adds one.

Step 6: Plan Your Tasting Room Within the Rules

The tasting room rules are where most distilleries make costly mistakes, so build your revenue model around them:

• Samples can be served at 0.5 ounce or less per sample.
• You may sell bottles at retail.
• On-premises servings must be mixed with water, ice, other alcohol or nonalcoholic mixers.
• Mixed servings for on-premises consumption may not exceed 30% of tasting room gross revenue in the calendar year. You must file an annual revenue report with the LCB.
• Unmixed spirits are limited to two ounces per person.
• Spirits, vermouth or sparkling wine made by others may be no more than 25% of your stock-keeping units (SKUs) sold.
• You must offer food, and you must post a list of at least five local restaurants or food trucks under RCW 66.24.1471.

For example, if your tasting room grosses $400,000 in a calendar year, your mixed cocktail servings for on-premises consumption can represent no more than $120,000 of that revenue. Track each sale by category from the first day you open. Ask the LCB how the revenue report should be prepared, and confirm how it defines the measurement period and categories before you set your menu prices.

Step 7: Set Up Your Tax Accounts

Washington has no corporate income tax and no personal income tax on wages. Instead, nearly every business pays the state business and occupation (B&O) tax, a gross receipts tax with more than 50 activity classifications and no deduction for labor, materials or other costs. Register through BLS and confirm with the Department of Revenue which B&O classification applies to manufacturing and retail sales of spirits.

The state sales tax rate is 6.5%, and you must collect sales tax on taxable retail sales, including bottles sold in your tasting room. Spirits are also subject to liquor-specific taxes and reporting beyond ordinary sales tax. Confirm current rates and filing rules with the LCB and the Department of Revenue, and do not rely on general sales tax guidance for alcohol.

Step 8: Build Your Compliance Calendar

After launch, set calendar reminders for each recurring obligation:

• Annual report with the Secretary of State: $70, due by the last day of the month in which your LLC was formed, every year. You can file up to 180 days early. A late filing brings the total to $95.
• Annual tasting room revenue report to the LCB, if you operate a tasting room.
• Business license renewal and B&O tax returns through the Department of Revenue.
• Raw material sourcing records, updated with every purchase.
• Any liquor license renewal or off-site tasting room renewal, as confirmed with the LCB.

Expected Results and Timeline

A well-planned distillery may be able to build a steady retail and tasting room business, and a clear sales-tracking system can help you stay within the 30% cap. Results depend on your product, location, pricing and local demand, and no outcome is guaranteed. Labels and advertising for spirits are regulated by the TTB, not the FDA, so review any health, quality or aging claims with the TTB rules and a qualified attorney before you publish them.

On timing, expect the entity filing and BLS application to move quickly compared with the LCB and local approvals. Many founders find the full sequence takes several months, but your timeline depends on your location and the agencies' current workloads. Build your lease and buildout schedule around the license approval date, not the other way around.

Common Mistakes to Avoid

• Signing a lease before zoning is confirmed. A lease that does not allow distilling or tasting room use can cost you the entire buildout.
• Assuming the craft rate applies. Without records showing that at least half of your raw materials are grown in Washington, you cannot prove eligibility during review.
• Filing the trade name with the wrong agency. Trade names go through BLS, not the Secretary of State or the county.
• Forgetting the BLS fee difference. Opening a business costs $50, while adding a trade name to an existing business costs $10.
• Building a cocktail-heavy model without tracking. If mixed servings exceed 30% of tasting room gross revenue, you face compliance problems in the year you cross the line.
• Ignoring the food and restaurant list requirement. You must offer food and post the list of at least five local restaurants or food trucks.
• Forgetting the annual report. A late LLC annual report adds a delinquency fee that brings the total to $95.

Cost Summary

Item	Fee	Agency
Certificate of Formation with Initial Report (LLC)	$180	Secretary of State
Name reservation (optional, 180 days)	$30	Secretary of State
Expedited service (optional, per entity)	$100	Secretary of State
Annual report (late total)	$70 ($95 late)	Secretary of State
Business License processing fee (new business)	$50	Department of Revenue
Trade name registration (each)	$5	Department of Revenue
Craft distiller license	$150	LCB
Fruit or wine distillery license	$300	LCB
Standard distiller license	$2,100 a year	LCB
Off-site tasting room (each, up to two)	$2,100 a year	LCB

This table does not include LCB application or processing fees, TTB fees, local permits, health district permits, insurance, or equipment and buildout costs. Confirm those figures directly with each agency.

Important Disclaimer

This article is informational content, not legal or tax advice. Laws, fees and agency procedures change. Verify every figure with the agency that administers it before you file. Because distillery licensing involves state liquor law, federal permits, zoning, and tax obligations, consult a qualified Washington attorney and a CPA before you commit to a structure or sign a lease. The Washington Small Business Development Center at wsbdc.org can also help you plan your next steps.