Do I Really Need a Business License as a Musician in Washington State?

So all this talk about the new sales tax has resulted in my receiving many, many, many messages from musicians about taxes. Unfortunately, most of whom don’t know what the real rules are in Washington State and how they affect them. So this post is about that. Do you need to pay taxes as a musician? Maybe not sales taxes, but probably B&O taxes. Read below.

Okay, let’s talk about something that most of us musicians avoid thinking about until we absolutely have to: business licenses.

I get asked this all the time,
“Do I really need a business license just to play gigs?
“What if I’m only making a little money?
“What if I’m barely breaking even?

So I’ve been digging into this, and honestly, the answer is probably not what you want to hear. But better to know now than to find out the hard way, right?

First Up – The $12,000 Question

Here’s what the Washington Department of Revenue says: if your gross income is $12,000 per year or more, you need to register for a business license. Ugh!

That’s not a big number if you are playing a lot of gigs or teaching lessons. Sorry. Also, notice that it is “gross income.” That means before you pay for gas, reeds, a new bass pickup, that new mic, or anything else. So if you made $15,000 from gigs but spent $8,000 on gear and expenses, you’re still over the threshold in their eyes. But wait, there’s more. (Of course there is.)

It’s Not Just About the Money

You might need a business license even if you’re under $12,000. Here’s where it gets tricky in Washington State.

You need to register if:

  • You’re doing business under any name other than your full legal name. So if you’re “The Blue Notes” or “Danny Kolke Music” or even just going by a stage name like “DK Trio”? You need a license. Ugh again,
  • You plan to hire anyone within 90 days,
  • You sell merchandise and need to collect sales tax.

So that $12,000 threshold? It’s really just one trigger among several. Most regular working musicians hit at least one of these.

Here’s a link to check out for all those “triggers”.
https://dor.wa.gov/open-business/apply-business-license

But It’s Just a Hobby. I Don’t Make A Lot of Money…

Yeah, I hear you. Maybe you think of yourself as someone who plays music for fun and happens to get paid sometimes.

Bad News, The State May See it Differently

Washington considers you a business when you engage in any activity for “gain, benefit, or advantage.” Doesn’t matter if you’re making a profit or not. Doesn’t matter if music is your full-time career or just something you do on weekends.

But I Have a Day Job, Does That Matter?

This is a big one. A lot of musicians work full-time jobs and think “I’m already paying taxes through my employer, so my music stuff doesn’t count, right?”

Bad News. Wrong again.

Your W-2 job and your music income are completely separate in the state’s eyes. Having a day job at Microsoft or Amazon or wherever doesn’t exempt you from needing a business license for your music activity.

Here’s how it works: when you’re at your day job, you’re an employee. When you’re gigging, you’re a business owner. Those are two different things.

The $12,000 threshold and all those other triggers? They apply specifically to your music income, not your total income. So if you made $80,000 at your day job and $5,000 from gigs, as an individual; you are probably okay. But if you operate under a band name or trade or stage name, you still need a business license for the “music business.“

It doesn’t matter that music is your “side hustle” or that it’s “just extra money.” If you’re getting paid for musical services, that’s business activity.

How Much Money Are We Talking About

Well, that depends. If you register and are not doing very much revenue, you may qualify for credits that wipe out what you owe. If you are a serious musician and making enough to survive on, then you probably are going to be paying about 1.5% in B&O Tax for Washington State. Again, it’s on gross income so it’s taken off the top. About the only good news is that you can deduct that from your IRS tax return for your business as an expense. More on that in this post: https://dannykolke.com/2025/10/02/musicians-bo-tax-in-washington-state/

When Do You Actually Need to Register?

Here are the scenarios where you need a business license: You probably need to register if you:

  • Made more than $12,000 gross from music-related income, performing and/or teaching,
  • Operate under a band name or stage name,
  • If you sell band merch – t-shirts, CDs, downloads,
  • Play gigs at venues, weddings, private events, corporate functions,
  • Do session work or recording for pay,
  • Do workshops or clinics (we’ll talk more about teaching in another post).

You might be okay if:

  • You truly only play for free (open mics, jam sessions with zero compensation),
  • You made under $12,000,
  • AND use only your legal name,
  • AND don’t sell any merch.

That second category is pretty narrow. Most of us who are gigging and/or teaching fall into the first one.

What Happens If You Don’t Register?

This is what everyone wants to know but doesn’t want to ask.
I’m just going to be straight with you.

Penalties and interest: The Department of Revenue can hit you with penalties and interest on unpaid B&O taxes. Interest adds up monthly. Penalties can be 5% to 29% depending on how late you are. If you’ve been making $10,000 a year from gigs for three years without reporting? That adds up fast.

Audits: They can audit you going back several years. They’ll look at your bank statements, PayPal, Venmo, 1099s that venues filed. If they find unreported income, you owe back taxes plus penalties plus interest.

How do they find out? Here’s the thing. Any client who pays you $600 or more in a year must file a 1099. That creates a paper trail. Any legitimate business that gets audited that has you on their payments as an expense, is another paper trail. Auditors like paper trails. Even if you have been paid less than $600 by a business, you are going to show up as a vendor and an expense.

What If You Didn’t Know About This?

Look, if you’re reading this and thinking, “Oh shoot, I’ve been gigging for years without registering,” you are not alone. A lot of musicians don’t know about these requirements.

The good news is you can register now. The DOR would rather have you come into compliance on your own than catch you in an audit. When you register, you’ll need to start filing returns going forward.

If you’ve had significant income in past years, you might want to talk to a tax professional about how to handle it. But the most important thing is to get compliant starting now.

I’m not a tax expert. I’m a musician trying to figure this stuff out just like you. But I’ve learned that getting this sorted out is better than waiting and hoping it goes away.

The Bottom Line

If you are regularly making money from music in Washington State, you almost certainly need a business license. Is it annoying? Yes. Is it one more thing to deal with? Absolutely. But it’s also part of being a professional musician. So now what?

How to Set Up Your Washington State Business License

Alright, so you’ve decided you need a business license. Here is exactly how to get set up with the Washington State Department of Revenue.

Before You Start Make Sure You Have:

  • Your Social Security Number (if you’re a sole proprietor),
  • Your business name (or just use your legal name),
  • Your business location/address,
  • An estimate of your expected annual income,
  • A debit/credit card for the application fee,
  • About 30 minutes of uninterrupted time.

Step 1: Use the Business Licensing Wizard

The Department of Revenue has a wizard that walks you through what you need. Start here: Business Licensing Wizard: https://secure.dor.wa.gov/gteunauth/?Link=wiz

The wizard will ask you questions about your business and tell you:

  • What licenses or endorsements you need,
  • What the fees will be,
  • What forms you need to complete.

For most solo musicians and music teachers, this will be pretty straightforward. You’re a sole proprietor providing services.

Step 2: Create Your “Secure Access WA” Account

You’ll need to create an account in Secure Access Washington. This will be your main login to access stuff. https://secureaccess.wa.gov/myAccess/saw/select.do

Step 3: Complete the Business License Application Online

Once you’re logged in:

  1. Click “Apply for a new business license,”
  2. Select “I want to start a business in WA State”,
  3. Fill out the application with your business information.

Key things you’ll need to answer:

  • Business structure: Most musicians choose “Sole Proprietor”,
  • Business name: You can use your legal name, or a “doing business as” (DBA) name,
  • Business location: Your home address is fine if that’s where you operate from,
  • Start date: When you first started earning money from music (be honest),
  • Business activities: Select “Services” and describe your musical activities,
  • Expected annual gross income: Make your best estimate,

Application fees: The fee varies based on your type of business, but it’s not very much. You’ll see the exact amount before you submit.

Step 4: You’ll Receive Your UBI Number

Once your application is approved, you’ll receive:

  • Your Unified Business Identifier (UBI) number, this is YOUR business ID number,
  • Your business license (physical copy mailed to you),
  • Your excise tax account set up automatically.

Save your UBI number! You’ll need it for:

  • Filing taxes,
  • Opening a New Checking Account etc,
  • Working with professional organizations, schools, etc.,

Step 5: Set Up Your Filing Schedule

The Department of Revenue will assign you a filing frequency:

  • Annual – if you have lower income,
  • Quarterly – most working musicians get this,
  • Monthly – if you’re making significant income,

You’ll be notified what schedule you’re on. Mark those filing deadlines on your calendar immediately.

What Happens After You’re Approved?

Once you have your business license and UBI:

  1. You are legal – you’re now compliant with Washington State and can legally operate,
  2. You’ll need to file returns – even if you made $0 that period, you must file,
  3. Keep your license current – it needs to be renewed periodically,
  4. Update if things change – new address, business name change, etc.

Do You Need City Licenses Too?

Remember, some cities have their own B&O taxes and licensing. If you’re regularly performing in cities like Seattle, Bellingham, or North Bend, check with those cities to see if you need to register there too and how their process works, and what their “threshold” is.

When you go through the DOR wizard to apply for your business license, it will ask you what cities you are doing business in. Mine is North Bend and I was able to complete the North Bend license in the same wizard.

Important Reminders

  • Start date matters: Be honest about when you started earning music income. Don’t say “today” if you’ve been gigging for two years.
  • Keep your contact info current: The DOR will send you important notices about filing deadlines and changes.
  • Save everything: Print or save copies of your application, approval, and UBI number.
  • Set up reminders: Put tax filing deadlines in your calendar NOW, not later.

Need Help? Don’t Hesitate to Call the DOR…

If you get stuck or have questions: Department of Revenue Business Licensing:

I can say that I have actually found the account setup people at the DOR very helpful in walking you through things, if you are nice to them. Hint… I’ve talked to them several times and they’ve walked me through stuff. Not as scary as it sounds. Better than the IRS.

The Bottom Line

Getting your business license isn’t that bad. It’s mostly just filling out a form online, paying a small fee, and waiting for approval. The hardest part is just making yourself do it, setting reminders and staying on top of filing and reporting stuff. But once it’s done, you’re legit, you’re legal, and you can focus on making music instead of worrying about compliance.

Useful Links:

Coming up next: Once you have your business license, what do you actually have to file? I’ll break down B&O tax returns, filing schedules, and how to handle income from different sources.

Note: This covers Washington State Department of Revenue requirements only. Federal taxes (IRS) are a whole different thing that we’ll tackle separately. When in doubt, talk to a tax professional who knows Washington State business rules.

Disclaimer: I’m figuring this out as I go, just like you. This is based on my research and conversations with tax professionals, but I’m not giving legal or tax advice. Check with your own tax advisor for your specific situation.

One thought on ““As a Musician do I need to pay taxes in Washington State?””

  1. Pingback: Musicians & B&O Tax in Washington State? – Danny Kolke

Leave a comment