Licensing & Taxes


Every business operating in the City of Lacey must be registered with the City. This includes home-based businesses, businesses with locations in the City, and those located outside of the City, but operating within the City of Lacey.  This also applies to temporary businesses (for example fruit stands, tree sales, car sales, etc.).  For more information on the City’s business license requirements, process, or fees, please visit the Finance Department website.

The City contracts with the State Department of Revenue’s Business Licensing Service (BLS) to help streamline and provide better benefits to local businesses. BLS acts as a one-stop-shop for business licensing requirements and offers an online application and renewal process option, including credit card and e-payment options. BLS also offers services that can help businesses to open, re-open, renew, and change ownership, and/or locations, as well as a myriad of other options for businesses.  Learn more at the City of Lacey’s BLS web page.

Certain business activities such as daycare services, mechanical music machines, for-hire vehicles, towing services, and pawnbrokers have additional registration requirements. For complete information regarding the business activities that require additional registration requirements, please review the Lacey Municipal Code Title 5:  Business Licenses, Registration, and Regulations. Please contact the Finance Department if your business activity requires additional registration requirements.


Business & Occupancy (B&O) Tax

The City of Lacey collects taxes from businesses in the form of the business and occupation (B&O) tax.  B&O tax revenues support general government functions.

Generally, every person, company, corporation, and association that engages in business in Lacey is subject to the City’s B&O tax.   The B&O tax is based on gross receipts.  There are some exemptions for businesses that qualify.  The City of Lacey has a special incentive for new small businesses: The City of Lacey Small Business Startup B&O Tax Exemption.  New small businesses opening within Lacey city limits with gross income less than $500,000/year, qualify for a three-year exemption from Lacey B&O taxes.

Chapter 3.02 of the Lacey Municipal Code provides additional information for specific businesses.

  • All businesses conducting transactions in Lacey, whether or not the business is physically located within the City, must be registered with the City of Lacey.
  • All business activity is subject to the B&O tax unless specifically exempted by Lacey Municipal Code.
  • For customers filing quarterly: B&O taxes do not apply if gross receipts are less than $5,000.
  • For customers filing annually: B&O taxes do not apply if gross receipts are less than $20,000.
  • The New Business Registration Pamphlet can provide answers to your questions.

You may also contact the Finance Department.

State and Federal Taxes

The Washington State Department of Commerce has excellent information for businesses, especially for new businesses or businesses opening for the first time in Washington, on taxes including real estate taxes, personal property taxes, sales taxes, and taxes withheld and paid when a business has employees. Visit the Department of Commerce website.