Businesses are subject to various federal, state, and local taxes. While businesses are likely to encounter all of the common taxes listed below, entrepreneurs are encouraged to consult a tax advisor and, depending upon the jurisdiction, relevant statutes.

Federal

Unless you are a nonprofit, your business will be subject to federal income tax.

For further information about federal taxes and tax incentive programs consult the Tax Information for Businesses Web site maintained by the Internal Revenue Service (IRS) at: http://www.irs.gov/businesses/index.html or contact the Seattle office of the IRS at (206) 220-6015.

IRS Local Office – Seattle, 915 Second Avenue, Seattle, WA 98174

State

Washington state does not impose a corporate, unitary, or personal income tax. However, most businesses will be subject to a business and occupations (B & O) tax, a retail sales/use tax, and state property taxes. The state also imposes taxes on such activities as public utilities, carbonated beverages, fish, timber, tobacco products, litter, refuse collections, petroleum products, and hazardous materials. However, some industries may be able to benefit from one of several state tax incentives.

For further information about state taxes visit the Access Washington State Government website discussing state taxes at: http://access.wa.gov/business/taxes_state.aspx or contact the Department of Revenue’s Telephone Information Center at 1-800-647-7706.

King County

All businesses in King County are required to file a personal property tax affidavit. The King County Assessor’s Office is responsible for assessing personal property used by a business. Personal property typically includes items used by a company to conduct business, and generally does not include property attached to a building or the land. Once a Master Business License is obtained from the state, an account is established for your business and personal property tax affidavits are mailed at the end of each year requesting information about business assets.

For further information visit the King County Department of Development and Environmental Services webpage discussing personal property tax affidavits at: http://www.metrokc.gov/ddes/business/property.shtm. For questions about the personal property tax valuation and process contact the King County Assessor’s Office at: (206) 296-7300.

City of Seattle

Every person or entity doing business within the city limits is subject to the business license tax unless specifically exempted by the Seattle Municipal Code. Seattle maintains a general gross receipts business license tax and a gross receipts utility tax.

Any business whose annual taxable revenue – reportable under the business license tax and earned within Seattle – is less than $50,000 is not required to remit a tax payment. However, a completed annual tax return must be submitted to ensure the City is made aware that no tax is due. No such tax threshold exists under the utility tax.

Businesses conducting activities in some industry sectors may also be required to pay City admission taxes or gambling taxes. For further information on these taxes, consult RCA online at: http://www.seattle.gov/rca/taxes/MoreInfo.htm or contact RCA at (206) 684-8484.

RCA maintains an online resource discussing City business taxes, including a guide, forms, rate classifications, and exemption and deduction information. The website is accessible at: http://www.seattle.gov/rca/taxes/Taxmain.htm.