If you own a business in Washington state, you already feel it. The costs are higher, the margins are thinner, and Olympia keeps adding to the pile. What used to be one of the most business-friendly states in the country has quietly become one of the most expensive places to operate — and business owners are taking notice.
According to the Association of Washington Business, tax burden has now vaulted to the number one concern for 72% of Washington employers — up 18 points in just over a year. The reason isn’t hard to find.
A Record Tax Increase — And It’s Not Over
In 2025, Washington passed a record $9.4 billion in new taxes. Then came a 9.9% income tax on households earning above $1 million. For W-2 employees, that might sound like a “millionaires’ problem.” But for small and mid-sized business owners structured as S-corporations, LLCs, or partnerships — the most common structures on Main Street and in the Eastside business corridor — pass-through income hits personal returns directly. That means your business profits are now subject to a tax rate that didn’t exist two years ago.
Layer on Washington’s Business and Occupation tax (which taxes gross revenue, not profit), the JumpStart payroll tax, proposed county-level B&O additions, and a minimum wage pushing toward $30 in Seattle — and the math gets painful fast.
Nearly 1 in 4 Washington Employers Is Considering Leaving
A Spring 2026 survey from the Association of Washington Business found that 24% of Washington employers are now weighing a move out of state — nearly triple the number from just 16 months ago. Only 9% plan to grow here. Meanwhile, 38% say their next expansion will happen somewhere else.
For business owners in King County and across the Puget Sound region, this isn’t abstract data. It’s the conversation happening at every chamber meeting, every industry lunch, every quiet coffee with a CPA or attorney.
What This Means If You’re Thinking About Selling Your Business
Here’s what most business owners don’t realize: tax pressure is one of the strongest motivators to sell — and one of the worst reasons to do it unprepared.
When owners feel squeezed, they tend to react. They cut hours, defer maintenance, and lean on personal savings. Each of those decisions quietly erodes business value. By the time they’re ready to seriously consider a sale, the business looks less attractive to buyers than it did 18 months ago.
The owners who get the best outcomes are the ones who start the conversation early — before burnout sets in, before financials reflect the stress, and before the market gets flooded with other sellers in the same position. Learn more about how I prepare Washington business owners for a successful exit.
The Window Is Open — But It Won’t Stay That Way
Private equity groups, independent buyers, and search fund investors are actively looking for well-run businesses in the Pacific Northwest. Despite the noise around Washington’s business climate, buyer appetite remains strong for companies with clean financials, transferable customer relationships, and steady cash flow.
But demographic reality is catching up. More than 6 million small and mid-sized businesses are expected to change hands by 2035 as baby boomers retire. More sellers competing for the same buyers means downward pressure on valuations. The owners who move first win.
If You’re a Washington Business Owner, Now Is the Time to Plan
You don’t have to sell tomorrow. But you do need to know what your business is worth, what it would take to make it sellable, and what your timeline looks like.
As a Bellevue and Seattle-based mergers and acquisitions broker, I work with business owners across King County and the greater Puget Sound area to prepare for, market, and close business sales — on their terms. Whether you’re 18 months out or five years out, the planning starts now.
Curious what your business might be worth in today’s market? Let’s talk.
