Washington City Business Licenses and Local B&O Taxes Compared: Fees, Thresholds and 54 City B&O Rates

Starting a business in Washington means dealing with state paperwork and then with local rules. The first local layer is the city business license, which many cities issue as an endorsement through the state's Business Licensing Service. The second is the local business and occupation (B&O) tax, which is separate from the state B&O tax and set by the city. This guide explains how the two fit together, compares fee and threshold structures for several cities, and shows where to find the full city-by-city rate list.

Disclaimer: This guide is informational only. It is not legal or tax advice. City fees, thresholds and tax rates change, and the figures here reflect 2026 sources. Confirm current amounts with the city and the state agency before you file. For complex situations, including multi-city operations, entity selection or tax planning, talk with a qualified attorney or CPA.

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How State and City Licenses Fit Together

Washington has 39 counties and 281 incorporated places, which are cities and towns. Most businesses deal with the state first and the city second. The Washington State Department of Revenue's Business Licensing Service (BLS) is the one-stop state channel. It issues the nine-digit Unified Business Identifier (UBI) number, registers trade names, and handles state and city endorsements in a single Business License Application.

BLS issues city endorsements for 223 cities and towns, and each city sets its own fee. Cities outside that list run their own licensing. Seattle, Tacoma, Bellevue, Kent, Everett, Renton and Shoreline are not on the BLS list. Whether your city is on the list determines where you apply for the city portion, so check before you file.

The order matters for entities. Corporations, LLCs and LLPs must file with the Secretary of State before they submit the Business License Application. An LLC files a Certificate of Formation through the Corporations and Charities Filing System (CCFS), with a $180 filing fee. Sole proprietors and general partnerships do not file with the Secretary of State, so they go straight to BLS.

The State Business License Application

The BLS application has several cost components, and they are easy to confuse:

Processing fee: $50 to open or reopen a business. This fee is non-refundable.
Lower processing fee: $10 when the filing is for another purpose, such as adding a trade name to an existing business.
Endorsement fees: city and state endorsements carry separate fees on top of the processing fee. Confirm each endorsement amount with BLS or the city when you apply.
Trade names: $5 for each trade name registered. Trade names are registered through BLS, not the Secretary of State or the county.

Timing depends on how you file. Online applications take about 10 business days. If city or state endorsements need approval, add 2 to 3 weeks. Mailed applications can take up to six weeks, so online filing is the faster route.

You need a state business license if any of these apply to you:

The business needs city, county or state endorsements.
It operates under a name other than the owner's full legal name.
It plans to hire employees within 90 days.
It sells anything subject to sales tax. The state sales tax rate is 6.5%.
It has gross income of $12,000 per year or more.
It owes any tax or fee to the Department of Revenue.
It buys or processes specialty wood products.
It meets nexus thresholds.

Comparing City Business License Fees and Thresholds

City license structures follow a few patterns. Some charge a flat fee, some add a per-employee charge, some tie fees to gross receipts or full-time equivalents (FTEs), and some exempt small businesses. The 2026 Department of Revenue city fee figures show these examples:

City	Fee structure (2026)	Small-business threshold
Spokane	$131 plus $10, $15 or $20 per employee, depending on tier	Not stated in this summary. Confirm with the city.
Vancouver	$0 on gross income through $4,000. A $53 fee on gross income above $4,000 through $53,000. Above $53,000, $347 plus $165 per employee-equivalent, where employee-equivalent is total hours divided by 1,664.	$0 through $4,000 gross
Kirkland	$100 plus $130 per FTE, above the threshold	$0 under $20,000 gross
Federal Way	$81 for 0 to 10 employees, rising to $9,501 for 501 or more employees. Home businesses pay $51.	Not stated in this summary. Confirm with the city.

Thresholds matter as much as the fee. Under the model ordinance, cities set a floor for businesses located outside the city. That floor rose from $2,000 to $4,000 of activity on January 1, 2026. Below the floor, the city exempts the business or charges nothing. A business with the same revenue and headcount can owe very different amounts from one city to the next, so run the numbers for each city where you have employees or customers.

The Larger Puget Sound Cities

Seattle, Tacoma, Bellevue, Kent, Everett, Renton and Shoreline do not appear on the Department of Revenue city fee list. Most larger Puget Sound cities use FileLocal or their own portals for licensing. If your business operates in one of these cities, you may still need a state Business License Application for your UBI, but the city license itself runs outside the state endorsement process. Check each city's website for its current fee schedule and forms.

Local B&O Taxes

Washington has no corporate income tax and no personal income tax on wages. Instead, most businesses pay the state B&O tax, a gross receipts tax with more than 50 activity classifications. It has no deduction for labor, materials or other costs. Washington also has no franchise tax. The state B&O tax is administered by the Department of Revenue, but many cities levy a separate local B&O tax that the Department of Revenue does not administer.

The 2026 Association of Washington Cities (AWC) B&O table lists about 54 cities. The AWC's own text says 53, so check the table itself rather than relying on either count. Six cities adopted local B&O taxes since 2022: Auburn, Tukwila, Covington, Poulsbo, Oak Harbor and Vancouver. A business that never had to think about city B&O may need to register in one of these cities now.

Some cities levy no B&O tax at all. Spokane, Kirkland and Redmond do not levy a city B&O tax. Being in one of those cities does not remove any state B&O obligation, so confirm both layers.

Local B&O Thresholds

The model B&O ordinance exempts receipts under $20,000 a year. Thresholds vary by city, though, so treat $20,000 as a starting point, not a safe harbor. A city may set a different number, may measure receipts differently, or may structure its exemption in a way that does not match the model.

How to Use the City B&O Rate Table

This guide does not reproduce every city's rate. Rates change through council action, and the AWC table is the current reference for the full list. When you review a city's entry, check these four items:

The current rate and the base it applies to.
The annual receipts threshold and whether it is measured by calendar year.
Whether the city's rules reach businesses located outside its limits that sell inside them.
How to register, and which office administers the tax. The Department of Revenue does not administer local B&O taxes, so you deal with the city.

Other Licenses You May Need

Many trades and professions need an occupational license from the state agency that regulates them, and some need a permit from a local health district. The main agencies are:

Labor and Industries (L&I): contractor registration, electrical and plumbing licenses.
Department of Licensing (DOL): real estate, cosmetology, notaries, security and tow operators.
Department of Health (DOH): health professions, home care and lodging.
Washington State Department of Agriculture (WSDA): cottage food, food processors and pesticides.
Liquor and Cannabis Board (LCB): liquor, cannabis and tobacco.
Department of Children, Youth, and Families (DCYF): child care.
Department of Social and Health Services (DSHS): adult family homes.
Utilities and Transportation Commission (UTC): movers and charter operators.

Steps to Take in Order

Choose your entity. Sole proprietors and general partnerships skip the Secretary of State. LLCs, corporations and LLPs file there first.
File your formation document. An LLC files a Certificate of Formation with an initial report, and a corporation files Articles of Incorporation with an initial report. Both carry a $180 filing fee. Expedited service costs $100 per business entity and is generally processed within three business days.
Designate a registered agent. Every business must have a registered agent in Washington with a physical street address and an email address. PO boxes and private mailbox addresses are not accepted. There is no fee to change the registered agent.
Register trade names and apply for your UBI through BLS. Budget the $50 processing fee, plus $5 for each trade name and any endorsement fees.
Check your city. If it is on the BLS list, endorsements come through the state. If it is not, apply through the city's own portal.
Confirm local B&O status with the city. Ask about the rate, the threshold and the registration process.
Calendar your annual report. An LLC or corporation files its $70 annual report by the last day of the month in which it was formed, every year. A late filing carries a delinquency fee, for a total of $95.

Official Resources

Washington Secretary of State, Corporations and Charities Division: https://www.sos.wa.gov/corporations-charities
Corporations and Charities Filing System (CCFS): https://ccfs.sos.wa.gov/
Secretary of State business search: https://ccfs.sos.wa.gov/#/BusinessSearch
Department of Revenue, apply for a business license: https://dor.wa.gov/open-business/apply-business-license
Department of Revenue, register a trade name: https://dor.wa.gov/manage-business/grow-business/register-trade-names
Washington State Department of Revenue: https://dor.wa.gov/
Washington Small Business Development Center: https://wsbdc.org/

Important: This guide is informational and is not legal or tax advice. Fees, thresholds and rates change, so verify each figure with the city, the Department of Revenue or the relevant state agency before you act. Consult a qualified attorney or CPA for complex situations, including operations in several cities, entity choice and B&O apportionment.