How to Start a Short-Term Rental Business in Washington: 30-Day Tax Line, the DOH Three-Unit License and Seattle's $75 Operator Fee

If you want to start a short-term rental business in Washington, the first number to know is 30. A stay of fewer than 30 days in a row is transient lodging, which brings retail sales tax and retailing B&O tax into play. Rent three or more units to transient guests and you also need a Department of Health (DOH) lodging license. Then your city or county may add its own operator license, registration, and local rules. This guide covers the steps in the order most hosts should handle them, using only the fees and deadlines we could verify.

This article is informational, not legal or tax advice. Lodging, zoning, and tax rules change, and local rules vary widely. Talk with a qualified attorney or CPA before you sign a lease, form an entity, or take your first booking.

What you need before you start

• The property address and written proof that you may use it for short-term rentals, such as a deed or a lease that permits subletting. Check your lease and any HOA rules before you list.
• A decision on your structure: sole proprietor, LLC, or corporation. Sole proprietors and general partnerships do not file with the Secretary of State.
• Your full legal name and a list of any brand names you plan to use on listing sites.
• A registered agent with a physical Washington street address and an email address. PO Boxes and private mailbox addresses are not accepted.
• A federal Employer Identification Number (EIN) from the IRS, and a business bank account.
• A list of units with their city, county, and planned opening date.

Step 1: Choose and form your business structure

Your structure determines which filings you make. A sole proprietor skips the Secretary of State and goes straight to the Business Licensing Service. Many hosts who plan to hold property, sign contracts, or bring in partners choose an LLC. To form one, file a Certificate of Formation with Initial Report through the Corporations and Charities Filing System at https://ccfs.sos.wa.gov/. The filing fee is $180. If you need time to settle on a name, a name reservation costs $30 and lasts 180 days. Your LLC name must include Limited Liability Company, Limited Liability Co., L.L.C., or LLC, and it cannot contain words such as bank, trust, or cooperative. Expedited service costs $100 per business entity and is generally processed within three business days.

A corporation files Articles of Incorporation with Initial Report for the same $180 fee. Both entity types owe an Annual Report fee of $70 each year, due by the last day of the month in which the entity was originally formed or registered. You may file up to 180 days early. A late filing carries a delinquency fee, bringing the total to $95.

Washington has no franchise tax and no corporate or personal income tax on wages. Its main business tax is the B&O tax, a gross receipts tax, so plan for it from your first booking.

Step 2: Register your trade name

Most hosts list under a brand, such as Cedar Creek Stays, rather than their own name. That brand is a trade name. Trade names are registered with the Department of Revenue (DOR) through its Business Licensing Service, not the Secretary of State or your county. The trade name registration costs $5 for each name, plus the non-refundable Business License Application processing fee. That fee is $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. Register at dor.wa.gov trade name registration.

Step 3: Apply for your UBI through the Business License Application

Washington's general business license runs through the Business Licensing Service (BLS) inside DOR. The application issues your nine-digit Unified Business Identifier (UBI) and can add city, county, and state endorsements in one submission. A short-term rental almost always needs one because you will likely meet at least one of these triggers:

• You operate under a name other than your full legal name.
• Your lodging is subject to sales tax.
• Your gross income reaches $12,000 per year or more.
• You owe any tax or fee to DOR.

If you form an LLC or corporation, file with the Secretary of State first, then submit the Business License Application. The processing fee is $50 to open a business, plus separate endorsement fees. Online applications take about 10 business days. If a city or state endorsement needs approval, add 2 to 3 weeks. Mailed applications can take up to six weeks. Apply at dor.wa.gov business license application.

Build that wait into your launch date. A listing that goes live before your endorsements clear is a common and avoidable problem.

Step 4: Understand the 30-day tax line

This is the step new hosts most often get wrong. DOR's lodging guidance treats stays of fewer than 30 days in a row as transient. Those stays are subject to retail sales tax and retailing B&O tax. The state sales tax rate is 6.5%, and local sales tax is added at rates that vary by location. Confirm your local rate on the DOR website before you set prices.

RCW 82.04.050 presumes that a continuous month or more is a real property rental. The two categories are taxed differently, so the length of each booking matters. Whether your particular arrangement qualifies is a tax question for a CPA, not something to settle on your booking calendar.

Stay pattern	Treatment
Fewer than 30 days in a row	Transient lodging: retail sales tax and retailing B&O
A continuous month or more	Presumed real property rental under RCW 82.04.050

Marketplaces such as Airbnb collect and remit state and local sales tax, plus special hotel/motel and convention taxes under RCW 82.08.0531. That does not remove your own obligations. You may still need a DOR account and may need to report facilitator sales. Ask the platform which taxes it collects for your city, then reconcile its reports against your own books.

Local B&O is a separate issue. About 54 cities levy their own B&O tax, and DOR does not administer it. Check whether your city does, and confirm how it applies to lodging.

Step 5: Decide whether you need a DOH lodging license

Three or more units rented to transient guests requires a DOH lodging license. The annual fee is $230 for 3 to 10 lodging units, $458 for 11 to 49 units, and $922 for 50 or more units. Confirm how DOH counts units on the Department of Health website before you pay anything or advertise a third unit.

Step 6: Check your city and county rules

Local rules are where short-term rental operations differ most. Washington has 39 counties and 281 incorporated cities and towns, and each sets its own rules. Confirm them before you take a booking. Seattle, as of 2026, is a useful example:

• Short-term rental operator license: $75 per unit per year, covering at most two units. You also need a business license tax certificate. Confirm with the city how it handles a larger operation.
• Rental Registration and Inspection Ordinance (RRIO) registration: $126 per property, plus $31.50 for each additional unit from January 2026. Registration is valid for two years.

Other cities and counties may require zoning approval, inspections, or their own short-term rental registration. Check the city or county page for your address before you list.

On a statewide level, HB 2559 would have allowed a local short-term rental tax of up to 4%. It did not pass, and as of October 26, 2026, it was stuck in House Appropriations. Do not assume a new state tax applies to you, but confirm whether your city or county has adopted its own lodging tax.

Step 7: Set up bookkeeping and tax filings

Open a separate bank account for guest payments and sales tax collected. Track sales tax you collect directly separately from tax the platform remits, so your numbers reconcile at year-end. DOR assigns your reporting frequency after registration, so confirm your schedule in your DOR account. B&O is owed on gross receipts with no deduction for labor, materials, or other costs, so build it into your nightly rate and cleaning fees.

Step 8: Calendar your renewals

Put these dates on your calendar on day one:

• LLC or corporation Annual Report: $70 by the last day of the formation month, every year.
• City business license and operator license renewals: confirm the renewal cycle with your city.
• Seattle RRIO registration: valid for two years.
• DOH lodging license: confirm renewal timing with DOH.
• DOR filings: follow the reporting schedule assigned to your account.

Common mistakes to avoid

• Assuming the platform handles every tax. It may collect some sales tax, but you may still need a DOR account and your own reporting.
• Skipping the UBI because you are a sole proprietor. A trade name or sales-taxable lodging can still require it.
• Missing the Annual Report. A late LLC or corporation filing raises the total to $95.
• Using a PO Box or private mailbox as the registered agent address.
• Assuming state rules cover your city. Seattle and other cities add their own requirements.
• Listing before endorsements clear, which can add 2 to 3 weeks to your timeline.
• Ignoring B&O because Washington has no income tax. Gross receipts tax still applies.

What results to expect

If you complete these steps in order, you may end up with a registered operation, a clear tax setup, and a renewal calendar that keeps you current. Hosts who follow this path may also find that banks, platforms, and city inspectors have fewer questions. Revenue depends on your property, location, pricing, occupancy, and local demand. Nothing in this guide promises any level of income, and results may vary widely.

Useful official resources

• Washington Secretary of State, Corporations and Charities Division: sos.wa.gov/corporations-charities
• Corporations and Charities Filing System: ccfs.sos.wa.gov
• Washington State Department of Revenue: dor.wa.gov
• Washington Small Business Development Center: wsbdc.org, a useful place to ask questions about your plan
• SBA Seattle District Office: sba.gov/district/seattle

This article is informational, not legal or tax advice. Before you form an entity, register with the state, or set up short-term rentals in multiple units or cities, consult a qualified attorney and a CPA who works with lodging operators.