Updated October 24, 2019
When deciding how to proceed with a rental property you need to know your regulations. You may have heard that some property owners need business licenses. This isn’t fully true.
While Washington state does not require business licenses, most cities require either a City Business License and/or a Washington State Business License. The best way to ensure you’ve met all your local requirements is to check the laws in the city your property is located in.
When do I need a Business License for my rental property?
You need a license if you are an LLC (Limited Liability Corporation) or run a vacation/short-term rental. If your property is owned and held by a WA LLC, you are required to have a business license. Some property managers form LLCs specifically for their rental properties.
Short-term rental managers also occasionally need business licenses. A short-term rental is defined as “lodging provided by an owner or operator for less than 30 or more consecutive days in a dwelling or residential unit for a fee.” Short term rentals do require a business license in Washington, but only if it grosses over $12,000 per year. If you are considering forming an LLC for your rental property you can find resources here.
Do I need a Business License for my vacation rental?
If you make over $12,000/year off it, then yes. Washington law considers vacation rentals short-term rentals and defines them as “lodging provided by an owner or operator for less than 30 or more consecutive days in a dwelling or residential unit for a fee.” If you have a vacation rental and rent on sites such as Air BnB and/or VRBO, this is considered a short-term rental in Washington.
Several cities now also require city-specific licenses or registrations for short term rentals. Most major cities in Washington including Bellevue, Kirkland, Kent, Burien, and Tukwila require either a City and/or State Business License. Check your local city website for more information.
Dimension Law Group has experienced Washington Landlord-Tenant lawyers that are ready to help. If you are a landlord and you have further questions, please contact our office for a free consultation.