Annual Tax Filing Guide for Washington LLC Owners

The Most Comprehensive Regulatory Compliance Guide for Founders in the U.S. and Abroad in 2025

The absence of personal state income tax and the robust technology sector, alongside the streamlined digital information systems, the state of Washington stands out as a destination for entrepreneurs, ecommerce sellers, consultants, and global founders seeking a business-friendly environment within the US and abroad. Washington has a leading tech sector and strong overall economic expansion.

The LLC formation process, whilst simple in nature, does require some comprehension of annual obligations required of the client.

Most business owners fail to take something seriously and face penalties, suspension of their business license, frozen tax accounts, and even administrative dissolution of their businesses. Missing something is often the main reason why individuals find themselves in such situations.

The objective of this guide is to provide non-U.S. founders with a thorough understanding of what LLC owners in Washington state must know about compliance, taxes and compliance and tax maintenance obligations for the renewals and continuing obligations required for streamlined administrative compliance.

1. Learning About Washington LLC Annual Requirements

Not unlike other states, Washington does not have an income tax but they have a unique compliance structure that reinforces business obligations in accounting.

Below is a detailed explanation of all requirements:

1.1. Core Annual Requirements (Mandatory for All LLCs)

Every LLC in Washington State must complete:

• Washington LLC Annual Report
• Renew Business License (through DOR)
• File B&O (Business Occupation) taxes
• File Sales tax (if applicable)
• File taxes with Federal IRS
• Keep a registered agent with a Washington Address
• Complete BOI filing under FinCEN rules (at formation/change only)

All requirements must be complete in their entirety in one (1) calendar year to keep your company in active status. They all must be repeated annually.

1.2. Additional Requirements (Depending on City, Industry, or Employees)

Depending on your LLC, you may also be required to comply with:

• Business licenses from the local city
• City B&O taxes ( for instance, Seattle, Tacoma)
• Endorsements for specific industries
• Employment taxes and/or payroll filings
• Quarterly wage reports
• Workers compensation and/or unemployment insurance
• Occupational permits or regulatory filings

To determine if your LLC is subject to any of these, you must look at your Business Location, Business Activity, and Customer base

2. Washington LLC Annual Report (EXTENDED)

This filing is the most important one for the owners of Washington LLC to complete annually.

2.1. Purpose of the Annual Report

This Annual Report enables the Washington Secretary of State to keep business information current.

It is important for the state to know all owners, managers, and representatives of the business in order to keep their records accurate.

This covers requirements for/related to:

• Liability Tracking
• Public Records
• Registered Agent Compliance
• Government Verification
• Business Legitimacy

2.2. Filing Due Date

This annual report is due every year on the anniversary date of your LLC’s formation.

Example:

If your LLC was formed on August 5, 2024, your report is due every year on August 5.

There is no grace period, and no reminders get sent, which can be problematic for international owners.

2.3. Filing Fee

The cost is:

• $69 (Flat fee for all LLCs)

This means Washington is on the more affordable side for annual reporting.

2.4. Information Required in the Report

You must update or confirm the following:

• Legal business name
• Washington UBI number
• Principal office address
• Mailing address
• Registered agent info
• Member/manager names & addresses
• Nature of business activities
• Contact information for official notices

If your LLC has foreign owners outside the U.S., their international addresses must be included.

2.5. Penalties for Late or Missing Filing

Neglecting to send the filings on time can result in the following:

• late fees
• loss of “active business” status
• inability to renew business license
• frozen tax accounts with the DOR
• potential administrative dissolution

Restoring a dissolved LLC can cost hundreds of dollars and may involve reinstatement filings.

3. Washington Business License Renewal (EXTENDED)

The Department of Revenue (DOR) oversees the Washington business license system. Almost every LLC based in or doing business in Washington is required to renew their state business license on an annual basis.

3.1. What is the Washington Business License?

It is an umbrella license applicable to:

• Washington-based physical business
• E-commerce/e-business
• Service providers
• Consultants
• Out-of-state businesses having Washington economic nexus

Out-of-state business are also subject to the requirement if they are registered in Washington.

3.2. Fees

The renewal business license fee is:

• $10 to $90 per year, depending on the endorsements; and
• Additional fees may apply for certain endorsements at the city level.
• Additional license fees may apply for certain services.

3.3. Renewals for City Endorsements

If your business sells to or operates in:

• Seattle
• Tacoma
• Bellevue
• Spokane
• Olympia

You may need an city business endorsement, which must be renewed on an annual basis.

Each city has the discretion to set their own fees, tax rates, and revenue thresholds.

3.4. Consequences for Not Renewing

• Your business license will become inactive
• Fines start to add up
• You will not be allowed to operate legally in Washington
• Your tax account may get flagged or be put on hold
• You may get charged transactions by vendors and payment processors or they may decline your transactions

4. Washington State Taxes for LLCs (FULLY EXPANDED)

Though Washington has no personal income tax, there are still excise taxes for businesses, and the most common is the B&O tax.

4.1. Washington B&O Tax (Business & Occupation Tax)

Washington has a unique system for the B&O tax. Instead of taxing the profit, they tax the gross revenue meaning:

• You are required to pay tax even in the event that your business is not making any profit
• Deductions for expenses are not allowed (unless there are some specific credits or exemptions)

4.1.1. Types of B&O Tax Classifications

Your business will be classified into one or more of the following list, as they each will have a different tax rate:

• Retailing
• Wholesaling
• Service and other activities
• Manufacturing
• Apportionable income (for businesses that operate in multiple states or countries)

Service businesses like consulting, design, and digital services usually will fall under the service classification, which typically has one of the highest rates for the B&O tax.

4.1.2. B&O Filing Frequency

The amount of money coming into your business is what determines what period of time you will have to file with the Washington DOR:

• Monthly (High-volume businesses)
• Quarterly (Most LLCs)
• Annually (Small businesses)

If you are from another country and are an international founder with little revenue coming from the United States, you will most likely be placed on annual filing.

4.1.3. Zero Returns Are Mandatory

This is mandatory filing EVEN if your LLC:

• Failed to earn money
• Has no American clientele
• Could not operate in the given year

You will still have to file a zero B&O return.

If you do not file for a zero B&O return, you can incur penalties and have your account suspended.

4.2. Washington Sales Tax

The state of Washington possesses one of the highest sales tax rates in the country.

Who Must Collect Sales Tax?

You must collect and remit sales tax if your LLC:

• Sells items
• Sells certain digital items
• Sells services that are taxable
• Has economical nexus in Washington
• Has clientele in Washington

Sales Tax Filing Frequency

Like B&O, this is based on your revenue:

• Monthly
• Quarterly
• Annually

Marketplace Sellers

If you are a seller through Amazon, Etsy, Walmart, and the like, the sales tax is often collected for you. However, you may still have to:

• File a return that states no tax is due
• Keep your DOR registration
• Complete requirements to renew your business license

5. Federal Tax Filing Requirements for Washington LLCs EXTRA DETAILED

The federal tax obligations of the LLC depends on the tax classification of the LLC as well as entity owners being U.S. or non-U.S. owners.

5.1. Single-Member LLC Default Disregarded Entity

If owned by a U.S. Person:

• File Schedule C with Form 1040
  
• Declare U.S.-source and worldwide business income
• Deduct expenses, depreciation, etc.

If owned by a non-U.S. Person

The following must be filed:

• Form 5472 and Pro Forma Form 1120
• An FBAR/FinCEN filing may be required.
• Form 1040-NR must be filed only if the LLC has income from U.S. sources.

Common Requirement for Foreign Owners:

Every foreign-owned single-member LLC must file Form 5472, even when there is no income.

5.2. Multi-Member LLC Partnership

A multi-member LLC must file the:

• Form 1065 Partnership Return
• Schedule K-1 for each partner

In addition, each of the owners must file their own income tax return reporting income, which will be passed through to them.

5.3. LLC Taxed as S-Corporation

To file:

• Form 1120-S
• K-1 Tax Documents must be issued to owners
• Owners must be on a company payroll

5.4. LLC Taxed as a C-Corporation

To file:

• Form 1120
• Includes a 21% Federal Corporate Income Tax
• May be additional taxes for dividends and distributions

6. Additional Washington filings and obligations (extended)

6.1. City Level Taxes

Seattle and a few smaller cities impose their own.

• Local B&O Taxes
• Local business license fees
• Miscellaneous Industry taxes (hospitality and transportation for instance)

In Seattle, a business must register once it expects to earn over $100,000 within the city limits.

6.2. Employment-related Compliance

If your LLC hires employees (even remote ones in Washington), you must comply with the:

• Employment Security Department (ESD) filings
• Quarterly wage reports
• Workers’ Compensation Insurance
• Paid Family and Medical Leave Contributions
• Compliance with Labor and Industries
• Payroll Tax Withholdings

Washington is stricter than most states, even for small businesses, when it comes to Employment Compliance.

7. Registered Agent Requirements (Detailed)

Washington requires:

• A physical Washington Address
• Someone from 8 am to 5 pm, Mon-Fri
• Acceptance of legal notices including lawsuits and other documents from the State

If your registered agent resigns:

• The state marks your LLC as “non-compliant”
  
• You have 30 days to appoint a new agent
  
• Your LLC may be dissolved if ignored
  

For international owners, maintaining a reliable registered agent is crucial.

8. Consequences of Failing to File Annual Taxes & Reports (Expanded)

Ignoring annual filings can lead to:

Immediate Consequences

• Late fees
• Tax penalties
• Business license cancellation
• Notices from the DOR

Serious Consequences

• “Delinquent” LLC status
• Inability to operate legally
• Frozen tax and sales tax accounts
• Loss of state contracts or permits
• Banks flagging or freezing accounts

Worst-Case Scenario

• Administrative dissolution of your LLC
• Loss of liability protection
• Requirement to re-register, repay, and restart compliance

A dissolved LLC cannot legally conduct business, apply for loans, or maintain contracts.

9. Washington LLC Annual Compliance Checklist (EXTENDED)

10. How Bizstartz Helps You Stay Fully Compliant

Bizstartz provides end-to-end compliance services to ensure your Washington LLC never misses a deadline.

Our Services Include

• Preparing & filing the Annual Report
• Renewing business licenses
• DOR registration & account maintenance
• B&O & Sales tax return support
• EIN & ITIN processing
• Bookkeeping & accounting
• Federal tax filing (1040-NR, 5472, 1065, 1120-S, etc.)
• Registered agent services
• BOI (Beneficial Ownership Information) filing
• Compliance reminders & deadline tracking

This is especially valuable for international founders who operate from abroad and cannot monitor U.S. deadlines.

Conclusion

When you know the state tax systems and filing requirements, keeping your Washington LLC in good standing is simple enough.

Plus, the overall structure is business-friendly. However, missing paperwork will easily lead to steep fines or immediate business dissolution.

From Miami to Seattle and even across the globe to Dubai or Kathmandu, your Washington LLC will need to file paperwork every year in order to be active.