Washington

Washington imposes NO CORPORATE INCOME TAX on C-corporations. However, Washington imposes a gross receipts or margin tax in lieu of a corporate income tax. Washington's rate structure is classified as "Gross Receipts Only" for purposes of this comparison.

Washington has no corporate income tax. Instead, Washington imposes the Business & Occupation (B&O) Tax on gross receipts, with rates varying by classification: 0.471% (retailing), 0.484% (wholesaling/manufacturing), 1.5% (services & other), 1.75% (financial businesses with >$1B annual income, increased 2025), and various other classifications.

Washington's Business & Occupation (B&O) Tax applies to the gross receipts of nearly every business operating in Washington, with no deductions for cost of goods or operating expenses. Rates vary by NAICS classification from 0.13% (manufacturing of certain items) to 1.75% (large financial institutions).

S-corps, partnerships, and LLCs are not subject to Washington corporate income tax (since none exists), but they ARE subject to the B&O tax based on their classification. Washington has no individual income tax (except a 7% capital gains tax on long-term gains over $270,000 enacted 2021).

For current corporate tax rules in Washington, consult the state's official source at https://dor.wa.gov/taxes-rates/business-occupation-tax. Rates and rules change annually — verify with a qualified tax professional before taking any action.