How to Start a Nonprofit in Washington State

Washington has 35,706 active 501(c)(3) organizations, 2,507 of them approved in the last twelve months, up from 2,436 the year before. Arts and culture groups are the second largest category after education, ahead of religion, and 73.8% report no revenue on file or under $50,000. Washington is unusual in two ways that cost money later: it gives nonprofits no blanket sales tax exemption, and it taxes their business revenue under the B&O tax, which most founders have never heard of.

The federal half of this is identical in every state and is set out on the state hub: incorporate, adopt bylaws, get an EIN, apply to the IRS on Form 1023 or 1023-EZ. This page covers what Washington adds, what each step costs, and the two or three things that catch people out here specifically.

What it costs in Washington

The state filings come to $40 in cash. That assumes you certify initial gross revenue under $500,000; without the certification the articles cost $80. The annual report is $20 or $60 a year on the same test. Charity registration adds $60, then $40 a year, once you are not exempt, and a $50 business license applies only above $12,000 of gross income or with sales tax to collect. On top of that sits the IRS user fee, which is set each year by revenue procedure and shown on Pay.gov when you file, so no figure for it is printed here. Every amount above was read from the issuing agency’s own fee schedule or form, and each one is linked in the sources at the foot of this page. Fees change: check before you budget.

The order to do it in

Sequence matters more than speed. The IRS application asks for documents the state has to create first, and the state charity regulator wants the organization to exist before it registers.

• Decide whether you need a corporation at all. Fiscal sponsorship gives a project the same tax treatment with no incorporation, no IRS application and no annual return. For a project under a few thousand dollars a year it is usually the better answer.
• File the formation document with the Washington Secretary of State, with the IRS purpose and dissolution language in it. Our articles template carries both.
• Adopt bylaws and appoint the board before the IRS application, which asks about governance. The bylaws template and the board guide cover what that means in practice.
• Get an EIN. Free, online, immediate, and needed for the bank account. Do not pay anyone for it: the EIN guide explains why people do.
• Apply to the IRS on Form 1023-EZ if you qualify, which most new organizations do, or the long Form 1023 if you project gross receipts over $50,000 or hold assets over $250,000.
• Handle the state exemptions and registrations in the section below, once the determination letter arrives.

What catches people out in Washington

There is no blanket sales tax exemption. Federal 501(c)(3) status does nothing for sales tax in Washington. The Department of Revenue says plainly that state law gives nonprofits no blanket sales or use tax exemption, so budget for tax on most purchases. The exemptions that exist are narrow: the main one covers fundraising income, provided the fundraising is not held at a regular place of business and the money furthers the organization’s goals.

Business revenue is taxed under B&O. Washington’s business and occupation tax is a tax on gross receipts, not profit, and the Department of Revenue says nonprofits must pay it on revenue from regular business activities. Donations are not taxed unless the donor gets significant goods or services back. Under $12,000 of gross income a year, with no sales tax to collect, you do not have to register at all.

Every state filing carries a charity fee, and you certify the discount yourself. Articles cost $30 and the annual report $10, but each carries the Charitable Asset Protection fee of $50, which falls to $10 if you certify gross revenue under $500,000. That is why the prices are $40 or $80 and $20 or $60. The Secretary of State does not check the certification for you, so certify only if it is true.

Three directors, and two different people at the top. Washington law allows a one-director corporation, but requires three or more once the corporation has applied to the IRS for exemption or public charity status. It also requires a president, a secretary and a treasurer, and the same person may not be both president and secretary. Write both into the bylaws from the start.

What Washington’s nonprofit sector looks like

From the IRS Business Master File, which lists every organization whose exemption has not been revoked.

The size column is the one worth sitting with before you file. 73.8% of Washington’s charities have no revenue figure on file or report under $50,000, against 77.5% nationally. The typical outcome of starting a nonprofit here is a very small organization, which is not an argument against doing it, but it is an argument for choosing the cheap route first and for being honest in the projections on the IRS form. What the whole thing costs, federal and state together, is set out in what it costs to start a nonprofit.

A realistic timeline

Written as weeks rather than as a list, because the waiting is the part people plan badly. Nothing here assumes you pay anyone to do it for you.

1. Week one. Agree the purpose, the name and the board: three directors, since you will be applying to the IRS as a public charity, and a president and secretary who are different people.
2. Week one or two. File the Articles of Incorporation with the Secretary of State for $40 or $80, with a registered agent at a Washington street address, a plan for assets on dissolution, and the initial report filed at the same time for free.
3. Same week. Apply for the EIN online. Free and immediate. The Secretary of State issues the UBI number with the articles.
4. Month one. Adopt bylaws, hold the first board meeting and open the bank account.
5. Month one or two. File Form 1023-EZ if you qualify, or the long Form 1023.
6. Before you solicit, if you are not exempt. Register with the Charities Program for $60.
7. Once income reaches $12,000 a year, or you sell anything taxable. Get the $50 business license and register for B&O and sales tax.
8. Every year. The annual report by the end of your formation month, and the Charities Program renewal by the end of the eleventh month after your fiscal year.

The long pole is the IRS, not Washington. The state end of this is measured in days and costs $40. Everything after the determination letter is either free or a form with a copy of that letter stapled to it.

What kind of charities Washington has

The Business Master File classifies each organization by activity. The six commonest categories in Washington account for 18,613 organizations between them:

• Education: 4,781 organizations
• Arts, culture and humanities: 3,243 organizations
• Religion related: 3,158 organizations
• Human services: 2,879 organizations
• Recreation and sports: 2,670 organizations
• Philanthropy and grantmaking: 1,882 organizations

That mix is worth checking against what you are planning. The largest category in every state is religion related, which is a reporting artifact as much as a fact, since churches are exempt automatically and many register anyway. The categories underneath it are the real map of what gets funded locally, and an organization entering a crowded category needs a sharper answer to the question of why it should exist separately than one entering a thin one.

Approvals in Washington are rising

The file carries a determination date for every organization, so the last two years can be compared directly. Washington had 2,507 approvals in the last twelve months against 2,436 in the twelve before that, a change of +2.9%. Nationally the last twelve months produced 115,927.

Read that as competitive context rather than as a verdict. More approvals means more organizations chasing the same local funders, and it also means the process is working normally for people like you. What it does not tell you is how many of them are still operating in three years, which the file cannot say, because it keeps listing an organization until its exemption is actually revoked.

After approval

The annual obligations start immediately and they run on two calendars. Federally, a return is due every year from the first full tax year, and three consecutive misses means automatic revocation with no appeal: which return applies is covered in which Form 990 you file. In Washington, the filings in the table above renew on their own cycle. If the organization eventually sells anything or lets space, selling products and renting out space cover the tax treatment, and if it does not work out, closing properly is its own process.

Method and sources

Every fee and form on this page was read from the issuing agency’s own page or form on 10 November 2026, listed in the sources below. Nothing here is copied from another guide. The IRS user fee is not stated because the form instructions point to a revenue procedure and to Pay.gov rather than printing an amount.

The counts are from the IRS Exempt Organizations Business Master File, filtered to subsection 03, with determinations through October 2026. Three limits carry over from that file: it includes organizations that are dormant but not yet auto revoked, the ruling date is when the IRS decided rather than when anyone applied, and revenue is blank for most small organizations, which is why the size row reads “no revenue on file or under $50,000” rather than giving a median. State is the organization’s own mailing address. This page is general information and not legal advice.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.