Washington Tax and CPA Services: State, County and City Taxes

Washington is the state people mean by "no state income tax," and for wages that is still true in October 2026. The state raises money in other ways: a gross receipts tax, a capital gains excise tax, a sales tax that now reaches many services, city taxes and payroll premiums. A new income tax on very high earners is also scheduled.

Individuals: what is taxed and what is not

The Department of Revenue (DOR) states that Washington does not currently have an individual income tax. Under SB 6346, signed March 30, 2026, a 9.9% income tax applies from January 1, 2028 to individuals and joint filers with adjusted gross income above $1 million, with first returns due April 2029. DOR says guidance on who must file and how income is measured will follow.

The capital gains excise tax reaches long-term gains. The tiered rates began with tax year 2025: 7% on Washington gains up to $1,000,000 and 9.9% from $1,000,001. Real estate and assets in certain retirement accounts are exempt, and the 2025 return was due April 15, 2026. For stock and other intangibles, DOR's questionnaire looks at whether Washington was your domicile at the time of sale.

Washington also has an estate tax. DOR lists a $3,000,000 exclusion for deaths on or after July 1, 2026, with the return and payment due nine months after death. Real estate excise tax is usually paid by the seller, at graduated state rates of 1.1% to 3% plus a local rate.

B&O tax, licensing and annual reports

Washington's business and occupation (B&O) tax has more than 50 classifications. DOR's rate list shows 0.471% for retailing, 0.484% for wholesaling and manufacturing, and 1.5%, 1.75% or 2.1% for service and other activities depending on prior-year gross income (under $1 million, $1 million to $4,999,999, or $5 million and up). Confirm current rates on DOR's classifications page. A small business credit is calculated automatically on electronic returns.

A Business Licensing Service license is required at $12,000 or more of annual gross income, and you receive a Unified Business Identifier number. Entities formed in Washington register with the Secretary of State first and file an annual report by the end of their formation month; a late report can lead to administrative dissolution.

Sales tax now reaches many services

The state rate is 6.5%, local rates are added and updated quarterly, and the rate follows where the customer receives the goods or services. Under ESSB 5814, from October 1, 2025 the tax also applies to advertising, IT and help desk services, custom website development, live presentations, security and investigation services, temporary staffing and custom software. Consultants and staffing firms should review invoicing. See sales and use tax.

Cities: Seattle, Tacoma, Bellevue and beyond

DOR does not collect city B&O taxes. The Association of Washington Cities' January 2026 list shows B&O taxes in Seattle, Tacoma, Bellevue, Everett and Bellingham, and Vancouver began its tax on January 1, 2026. Redmond and Sammamish do not appear on it.

• Seattle B&O: The threshold rose from $100,000 to $2 million on January 1, 2026.
• Seattle payroll expense tax: For 2026 it applies to businesses with at least $9,074,409 of 2025 Seattle payroll that paid an employee $194,452 or more, at rates from 0.746% to 2.557%, filed quarterly.
• Property tax: County assessors value property at 100% of market value, county treasurers collect, and appeals go to the county board of equalization.

See our Seattle page.

Payroll in Washington

• Unemployment: The Employment Security Department sets a 2026 taxable wage base of $78,200 ($72,800 in 2025). New employers pay 115% of their industry average for 2026.
• Paid Family and Medical Leave: The premium is 1.13% of gross wages in 2026 and 1.2% from January 1, 2027. Employers with fewer than 50 employees need not pay the employer share.
• WA Cares: 0.58% of pay. The program lists temporary workers on a nonimmigrant visa as automatically exempt.
• Workers' compensation: RCW 51.14.010 requires employers to insure with the state fund or qualify as self-insurers.

See unemployment insurance and paid leave programs.

Tech workers in Redmond, Bellevue and Sammamish

With no state tax on wages, the main Washington questions for H-1B and NRI employees are stock sales and work done in other states. A long-term gain on shares sold while you are domiciled here may be Washington capital gains, and a remote role performed in another state can create that state's filing duty. See H-1B and visa holders and RSUs and stock options.

How we can help

For individuals, we can test whether a stock sale crosses the Washington capital gains deduction, prepare the excise tax return, and coordinate it with federal and India-related reporting. For businesses we can classify B&O activities, review sales tax on services you now invoice, and match city licenses to where you work. Our multi-state tax service covers cross-border questions.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.