Index
Business & FinanceWashington, USA

Washington No State Income Tax

Summary

Washington State does not levy a personal or corporate income tax, instead relying heavily on sales taxes and a Business and Occupation (B&O) gross receipts tax.

Rights & Rules

  • 01.
    You do not pay a state income tax on your W-2 wages or salary.
  • 02.
    The state makes up for this by having one of the highest sales taxes in the nation (often over 10% in major cities like Seattle).
  • 03.
    Businesses do not pay corporate income tax, but they do pay a tax on their total gross revenue (B&O tax), regardless of whether they make a profit.
  • 04.
    A relatively new capital gains tax was introduced in 2021 on the sale of highly profitable long-term assets (like stocks and bonds) over $250,000, though this has faced significant legal challenges.

Penalties

  • 01.
    Failure to pay the B&O tax as a business owner or failing to remit collected sales tax can lead to severe penalties, interest, and the revocation of your business license.

Verified Citations

Washington State Constitution, Article VII

Source
"Washington state does not have a personal or corporate income tax. However, people or businesses that engage in business in Washington are subject to business and occupation (B&O) and/or public utility tax."