Washington State taxation of corporate director fees and other compensation is subject to rules one might not anticipate.  Taxable director compensation includes not only cash and checks, but also stock options and other property, bonuses, awards, etc.  Directors must also include in reported fees reimbursed expenses for  meals, travel and other related personal expenses.  If compensation equals or exceeds $12,000, a director must register with the Department of Revenue and receive a Master Business License.  All compensation is subject to Business and Occupation tax under the “services and other activities” classification.  The tax rate is currently 1.8%.  The good news includes the fact that corporations  may report and pay their directors’ taxes, but directors are always responsible for assuring payment.

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