Renton revises business license fee exemptions

Published 7:30 am Friday, January 2, 2026

Renton is increasing the threshold for business license fee exemptions to aid small businesses outside of the city limits.

The Renton City Council recently passed an ordinance that will raise the exemption threshold from $2,000 or less to $4,000 or less in annual value of products, gross proceeds of sales, and gross income for businesses that do not maintain a place of business within the city.

This exemption will allow small businesses under the threshold to be spared of the $150 fee due and payable when filling out a completed registration for a general business license.

The ordinance also includes an addition that will increase the threshold in the future based on the consumer price index up to 5%. These changes will occur every four years.

According to the ordinance, the city is making this change to be in compliance with the Association of Washington Cities’ 2018 business license model ordinance that mandates an increase to the business license threshold for out-of-city businesses and applying automatic periodic increases based on cumulative inflation.

“The Business License Ordinance was updated to meet the criteria set by House Bill 2005, which was adopted in 2019,” Renton Tax and Licensing Manager Fred Hall said. “This allowed cities to create a workgroup to review the business license threshold. This change reflects our commitment to fostering local economic growth while maintaining fairness for businesses operating outside city limits.”

Other businesses that are already exempt from the fees are businesses that can demonstrate they are nonprofit according to federal taxing purposes.

An out-of-city business with annual Renton gross receipts less than $4,000 is still required to obtain a Renton business license, but there will be no license fee charged. In-city businesses are not affected by the amendment.

The new threshold amount will go into effect on Jan. 1, 2026.