WA state business laws, setting up a new business in WA state, tax consequences on income

Seattle, WA Viewed 393 times. Posted about 1 year ago in Business

Dj Agency: I would like advice on setting up a DJ agency business in Washington State. I will only be taking a 15% cut from each DJ's fee. Initially I project incoming to be very low Like $300 per month. Do I still need to register for tax or is there a threshold amount before you have to begin paying taxes on your income?

Answers (3)

Ann Davison Sattler

This attorney is licensed in Washington and 1 other state. Posted about 1 year ago.

There are several taxes a business in Seattle, WA is subject to and the type of business entity (sole proprietorship, LLC, etc) plays a part too. You need to first establish the appropriate entity form for your new business.

Some of these taxes must be filed even if they are low or zero; some you file and get a credit for a certain amount. Some taxes are applicable only to certain types of businesses. These are all, of course, subject to change with the laws of the state, county and city in which your business is operating.

Patricia Paul

This attorney is licensed in Washington. Posted about 1 year ago.

Here's a good staring point, the Washington State Licensing FAQ website: http://www.dol.wa.gov/business/faqnewbusiness.html

info

Posted 9 months ago.

Washington State taxes you on your gross income. It's called a B & O tax. There's no personal income tax here. Technically, regardless of what you call it, you still owe WA dept of revenue the tax.

It's .015% of your gross income. What is bad about your business is, if you're a referral agency, I'm assuming you're collecting the total and then paying the other dj's. So if you collect it, you'll be paying the tax on the whole amount, because it's not off of what you make, it's off of what you take in.

Take our business for example: http://www.washingtonregisteredagent.net

All we do is business registrations. When we help someone, it's easier for us to just take their money and then we pay the WA secretary of State fees, which are $200.00. We charge $100.00 plus the $200.00 WA State fee to register them. So we pay the tax on collecting the States $200.00 registration fees.

Here's the silver lining. In WA, if your business is small, you can become totally tax free. WA gives you the first 40k totally tax free. It then gradually exempts it to about 70K. After that you'll pay the whole .015% of your gross income. So you could operate a nice little business practically tax free.

You could do this as a sole proprietor or an LLC. If you do an LLC, you'll be able to deduct more expenses and really legitimize your business.

If you want to minimalize your WA State taxes, you could make the DJ's collect the money from the end client and then make the DJ's pay you your 15% cut. You could do a lot of business tax free under that plan.