Home Services Acquisition Attorney in Washington

Non-Compete Agreements

Restricted by an annually adjusted salary threshold ($126,858 for employees in 2026) under RCW 49.62.020. 18-month presumptive maximum. Terminated employees must be paid base salary during the restriction period.

Restricted under RCW 49.62 (effective January 1, 2020). Non-competes are prohibited for employees earning less than $126,858 annually (2026 threshold, adjusted annually) and for independent contractors earning less than $317,147 annually. Non-competes exceeding 18 months are presumptively unreasonable. Employers must disclose the non-compete terms at or before the time of hire. Employees who are terminated (as opposed to voluntarily leaving) must be paid their base salary during the restriction period. The sale-of-business exception is preserved.

Tax Considerations

Washington has no corporate income tax and no personal income tax. The state imposes a Business & Occupation (B&O) Tax, a gross receipts tax at rates varying by business classification (0.138% to 3.3%). As a community property state, Washington requires the consent of the other spouse to sell or encumber the assets or goodwill of a business both spouses help manage, and both spouses must join to convey community real property, under RCW 26.16.030(6). Washington enacted a 7% capital gains tax on gains exceeding $262,000 (2024 threshold), which was upheld by the state supreme court.

Filing Requirements

Entity mergers and conversions must be filed with the Washington Secretary of State. Annual reports are required. The Department of Revenue handles B&O tax registration and capital gains tax compliance.

Bulk Sales / Asset Purchases

Washington has repealed UCC Article 6 (Bulk Sales). Washington Revenue and Taxation statutes permit the Department of Revenue to pursue successor liability against asset purchasers for the seller's unpaid taxes. A tax clearance certificate should be obtained before closing.