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Washington State vs Wyoming LLC

Washington State has no state income tax, which makes it sound LLC-friendly. But Washington's Business & Occupation (B&O) tax charges on gross revenue (not profit), which compounds quickly. Wyoming has no equivalent. Here is the comparison.

Answer

Wyoming wins for non-resident founders. Washington B&O tax charges 0.471-1.5% of gross revenue (not net), which adds significant cost as revenue scales. Wyoming has no franchise tax or gross receipts tax. Privacy is better in Wyoming (no member/manager names on filings). Annual cost: Wyoming ~$160 vs Washington ~$200-$2,000+ depending on revenue.

By Zawwad, Founder & CEO, WyomingLLC by Topslice LLC.

Last updated May 20, 2026

Washington B&O tax structure

Washington charges Business & Occupation tax on gross revenue (not net profit). Rates vary by classification: 0.471% for retail, 0.484% for wholesale, 1.5% for services. So a $200K-revenue services LLC owes ~$3,000/year in B&O alone.

Privacy comparison

Wyoming: no names on filings. Washington: requires governing person disclosure on annual reports. Lower privacy than Wyoming.

When Washington might make sense

  • You operate physical business in Washington (warehouse, employees)
  • You are a Washington resident
  • You want Washington's specific business protections

Cost over 5 years

Wyoming 5-year: ~$1,037. Washington 5-year for a $100K-revenue services LLC: ~$8,000 in B&O + ~$200 annual report = ~$8,200. Difference: ~$7,000. For non-residents without Washington nexus, no reason to pick Washington.

Frequently asked questions

Does Washington have state income tax?
No personal income tax, no corporate income tax. But B&O tax on gross revenue functions similarly for business taxation purposes.
Can I avoid B&O tax if I have no Washington customers?
Yes if no Washington nexus. Non-resident LLCs without Washington sales typically do not owe B&O. But Washington's enforcement is aggressive on nexus claims.
Can I form Washington LLC through {BRAND}?
No. We focus on Wyoming. For Washington, consider doola or local Washington services.

Related guides

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