Washington LLC Taxes

State entity taxes

Franchise / privilege tax: Business & Occupation (B&O) Tax 0.471–1.5% of gross receipts (no income tax).

State income tax on members: Washington has no state personal income tax, so members pay no state tax on their share of LLC pass-through income.

Federal taxation

By default, single-member LLCs are disregarded entities and report on Schedule C of the owner’s personal return. Multi-member LLCs file Form 1065 (partnership). Either may elect S-Corp or C-Corp tax treatment via Form 2553 or Form 8832.

Sales tax

If your Washington LLC sells tangible goods or certain taxable services, you generally need a state sales tax permit. Check the Washington Department of Revenue / Taxation for the applicable rate and registration process.

Washington-specific note

Washington has no state personal income tax (capital gains tax exists for high earners), but levies a Business & Occupation Tax on gross receipts that applies to most LLCs.

Self-employment tax (federal)

Members of pass-through LLCs generally pay self-employment tax (15.3% on the first ~$168,600 of net earnings, plus 2.9%+ Medicare beyond that) on their distributive share. Electing S-Corp status can sometimes reduce SE tax but adds payroll-administration complexity.