Washington concentrates nearly everything trade-related inside one agency, Labor & Industries, and does two things that surprise incoming contractors: it taxes construction like retail, and it sells you your workers comp itself. Here is 2026.
L&I registration, certification and the doubled bonds
General and specialty contractors must register with L&I, carry liability insurance and post a surety bond, and those bonds doubled in July 2024 to $30,000 for general contractors and $15,000 for specialty contractors, a real barrier-raiser worth budgeting. Electricians are certified statewide by L&I (journey-level 01 and specialty cards) with contractor licenses on top, and plumbers carry state certification through the same agency. Working unregistered is an infraction with per-job penalties, and customers can check any contractor in seconds on L&I's Verify tool.
Liens and notices
Most subs and suppliers on residential and commercial work protect rights with a Notice to Owner (professional services and suppliers within 60 days on most projects, shorter on owner-occupied residential), then record the claim of lien within 90 days of last furnishing and sue within eight months. Washington's forms are statutory, so use current ones.
Workers comp: the state fund
Washington is a monopolistic workers comp state: industrial insurance is bought from L&I, calculated on hours worked per risk class rather than payroll, with premiums split between employer and worker. Out-of-state policies do not cover Washington work; register and report hours from job one.
Sales tax on construction, and WISHA
Unlike most states, Washington charges retail sales tax on the full contract price of custom construction, collected from the customer, alongside the contractor's own B&O tax on gross receipts. Speculative building and government road work follow different models, and getting the category wrong is the classic Washington audit finding. Safety enforcement is WISHA, the state plan run by L&I's DOSH, with its own rulebook layered over federal OSHA. There is no state income tax.
- Registration: L&I; bonds $30,000 GC / $15,000 specialty (doubled 2024)
- Trade certification: Electricians and plumbers certified statewide by L&I
- Notice to Owner: Within 60 days for most subs/suppliers (shorter on owner-occupied)
- Claim of lien: 90 days from last furnishing; suit within 8 months
- Workers comp: Monopoly state fund (L&I), hours-based premiums
- Sales tax: Charged on the full custom construction contract price + B&O tax
- OSHA / income tax: WISHA state plan; no state income tax
Washington FAQs for trade businesses
Why did my bond requirement double?
Statewide changes effective July 2024 raised contractor bonds to $30,000 (general) and $15,000 (specialty) to improve consumer recovery. Factor the higher premium into overheads.
Do I charge my customer sales tax on labor?
On custom construction, yes: retail sales tax applies to the full contract price including labor, and you also owe B&O tax on gross receipts. Speculative builds and certain public road work are treated differently, so classify each contract before invoicing.
How does hours-based workers comp change my quoting?
L&I premiums are per hour worked per risk class rather than a payroll percentage, so labour-heavy jobs carry proportionally more insurance cost. Build the per-hour L&I rate into your charge-out rate the same way you build in wages.
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SKEDS for US tradesFree invoice templateFree quote templateThis guide is general information, not legal advice. Licensing thresholds, lien statutes and tax rules change; always confirm current requirements with the licensing board, an attorney or your accountant before relying on them.