2026 tax year · Washington
Marketplace seller taxes in Washington
Etsy, eBay, Shopify and the rest report your gross and withhold nothing. The gap between that and what you are taxed on is your costs, in Washington that gap is worth $5,937 in tax.
Take a driver who grossed $45,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the marketplace seller page $26,775 comes off and $18,225 is left as taxable profit. That profit is what Washington and the IRS charge against.
What that leaves you owing in Washington
| Self-employment tax | $2,575 |
| Federal income tax | $67 |
| Washington income tax | $0, no state income tax |
| Total tax | $2,642 |
| Effective rate on gross | 5.9% |
Earning more in Washington
A single filer taking the standard deduction, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:
| Volume | Gross | Mileage off | Taxable profit | Washington tax | Total tax | Rate on gross |
|---|---|---|---|---|---|---|
| Part-time | $15,000 | $0 | $15,000 | $0 | $2,119 | 14.1% |
| Steady side income | $45,000 | $0 | $45,000 | $0 | $8,579 | 19.1% |
| Full-time | $72,000 | $0 | $72,000 | $0 | $14,803 | 20.6% |
Washington specifics that change the number
On the 2026 rate itself: no general income tax. Capital gains tax 7% on gains >$262,000 (2026), 9.9% on gains >$1M.
Washington is a community property state. In community property states, income earned during marriage is generally owned equally by both spouses. This affects QJV eligibility, MFS filing strategies, and retirement account contribution rules.
Washington is the big exception among no-income-tax states: its business and occupation (B&O) tax is a gross receipts tax, on revenue, not profit, with no deduction for expenses, from the first dollar. For services the rate is 1.5% when prior-year receipts are under $1,000,000 (1.75% from $1,000,000, 2.1% from $5,000,000); retailing is 0.471%. Two reliefs matter for small operators: you only need to register with the Department of Revenue once gross income reaches $12,000 a year, and the small business credit wipes out B&O liability below $3,840 a year for service businesses filing annually.
Selling into and out of Washington
Income tax follows you: Washington taxes your profit wherever the buyer was. Sales tax does not. Marketplace facilitator laws make the platform collect and remit sales tax on your behalf in most states, which is why a seller can have customers in all fifty and still file only one income tax return. Selling off-platform is where that stops being true.
On $18,225 of profit, what the states around Washington would charge:
| State | Its tax | vs Washington |
|---|---|---|
| Oregon | $866 | +$866 |
| Idaho | $966 | +$966 |
- Oregon would take $866 more, $866 against Washington's $0.
- Idaho would take $966 more, $966 against Washington's $0.
Marketplace seller tax questions in Washington
How much should a Washington seller set aside?
About 5.9% of gross on the $45,000 example, $2,642 across self-employment tax, federal income tax and nothing to Washington. In practice that means moving about $59 of every $1,000 payout into a separate account the day it lands, and sending roughly $661 to the IRS each quarter, no platform withholds any of this for you. Set aside from each payout rather than finding it in April.
Does the $45,000 on my 1099-NEC match what Washington taxes?
No. Washington taxes profit, not gross. After $26,775 of deductions the taxable figure is $18,225, so there is no Washington tax either way. But the federal side drops by $5,937. The form reports what the platform paid out, it knows nothing about your costs, and no one subtracts them for you. On this example 60% of the gross never becomes taxable income, but only for the seller who kept the records to prove it.