Starting a Business in Washington
Washington is home to some of America’s top powerhouses including Google, Amazon, Starbucks, Microsoft and Boeing. This has paved the way to making it one of the largest tech hubs in the nation. It has led to an expansion of support networks powered by acceleration platforms to really give tech companies the edge over other states. If you add in the educated and highly skilled workforce, it is no wonder that more and more startups keep popping up. Washington businesses can leverage multiple incentive programs to expand business growth. The most common are incentives that are given through tax credits, exemptions, grant/loan programs, and to companies who reside inside designated Empowerment Zones.
STEPS TO STARTING A BUSINESS IN WASHINGTONIf you are trying to start a business within Washington State, there are some activities that you will need to undertake. You will first need to form a company with the Washington Secretary of State. Their office has resources where you can perform a business name search and get the proper documents you need to comply with state regulations. After your company is setup, you can apply online for an EIN. This Tax ID Number will allow you to do things such as open a business bank account, apply for business credit cards, and rent commercial office space. If you do rent an office, one of the things you want to make sure you have is the proper Business Licenses. Additionally, there are many other things to do like trying to pay Washington sales tax after looking up a Washington sales tax rate, and researching form: Business License Application. Some of your business may reach outside the borders of Washington State. You will need to apply for an SST streamlined sales tax permit if you make out of state sales and exceed certain thresholds. When you are done with everything else you can see which incentives are advantageous for your company. Here are some of the programs that are offered to businesses in Washington.
- Washington State Sales Tax Exemptions are offered to businesses within certain industries which include Research & Development, Biotechnology, Manufacturing and the energy used in the manufacturing process, and custom computer programming. Capital expenditures on equipment and machinery used in R & D as well as in the manufacturing process of tangible personal property that is for resale qualify for a Sales Tax Exemption. Additionally, an exemption is available for any energy (electricity or fuel) related expenses used in the manufacturing process. The cost of equipment and machinery used in a biotechnology capacity, as well as the renovation of buildings qualify for Sales Tax exemption. Any customized computer programming is also sales tax exempt.
- Washington also has a Data Center Tax Exemption Project. Sales Tax Exemptions are given to any data center equipment that is used in daily operations. Exemptions are given to any qualified data center equipment or services related to that equipment. Eligible data center exemptions include:
- Hardware such as servers and routers
- Power Infrastructure
- Pre-written computer software
- Cages or racks used to house servers
- Repair, service, or clean infrastructure
- Service, Install, alter, or repair tangible equipment
- The Washington Empowerment Zone Programs provide various benefits to incentivize businesses to relocate to economically distressed areas. These high unemployment areas will have an unemployment rate of at least 20% above the 3 year average of combined total unemployment of the rest of the state. There is also the rural county Empowerment Zone incentive which is geared toward creating new jobs for businesses that open or relocate operations into a rural community. A tax credit is given against Washington B&O tax.
- Washington has a major workforce development job training program that can help a business strengthen its workforce and deliver good quality training to individuals most in need. To qualify, companies must meet certain requirements which include.
- To expand the skill sets of current or new employees in areas where they are underdeveloped and economically challenged.
- Provides work in areas with high levels of unemployment and disadvantaged workers. Where workers have a hard time finding employment anywhere else.
- Provides industry specific training for workforce expansion to enhance growth of those industries.