A Washington State Licensed CPA, working with you from wherever you are.

Washington charges no personal income tax and no corporate income tax — full stop. What it charges instead is the Business & Occupation (B&O) tax, a tax on a business's gross receipts rather than net profit, with no deduction for expenses. Rates depend on how your business is classified: 0.471% for retailing, 0.484% for wholesaling and manufacturing, and a tiered rate for Service & Other Activities that took effect October 1, 2025 — 1.5% below $1 million in prior-year gross income, 1.75% from $1 million up to $5 million, and 2.1% at $5 million and above (hospitals and certain advanced-computing businesses stay at 1.5% regardless of size). A separate 0.5% surcharge applies only to businesses with more than $250 million in Washington taxable income per year, effective January 1, 2026 — well outside the range of most small businesses, but worth knowing exists.

A Small Business B&O Tax Credit can reduce or eliminate the state B&O bill entirely for the smallest filers: service-heavy businesses with monthly net B&O tax under $160 owe nothing, phasing out by $320 a month; other businesses owe nothing under $55 a month, phasing out by $110. It's worth checking before assuming you owe the full rate.

Roughly half the cities we cover layer their own city B&O tax on top of the state tax — Seattle, Tacoma, Bellevue, Vancouver, Olympia, Bellingham, Renton, and Kent among them, each with its own rates and thresholds (Kent even adds a separate square-footage tax). Spokane, Kirkland, Redmond, Kennewick, Pasco, Richland, and Yakima charge no general city B&O tax at all, relying instead on a business license fee; Everett charges a flat rate regardless of classification. None of that is guessable from one city to the next — see each city's page for specifics.

For individuals, the number that matters most is Washington's capital gains tax: 7% on the first $1,000,000 of taxable gain above a standard deduction ($278,000 for 2025, the most recently published figure — the Department of Revenue had not posted a 2026 inflation-adjusted number as of this writing) and 9.9% on taxable gain above $1,000,000. It applies to gains from the sale of stocks, bonds, businesses, and most other capital assets — not wages, not retirement accounts, and not real estate, which has its own exemption.