washington business
• Reluctance to update technology: Regulations can lead to new problems that were not anticipated, such as increased reliance on unsafe or outdated technology due to regulations that make newer, more efficient options less economically viable.
• Business relocation or expansion elsewhere: Some regulations can lead to businesses leaving the state or choosing to expand in other states to escape the regulatory burden of their home state.
excessive and duplicative regulations add up
The StratACUMEN study estimates that half of the state’ s regulations are duplicative or redundant, with up to 70 % qualifying as administrative“ red tape.” These often stem from overlapping agency authority, layered permitting and reporting requirements, outdated standards, and conflicting rules.
The implications are significant— especially for smaller businesses without dedicated compliance staff.“ Even where regulatory goals are widely supported, redundancy magnifies compliance time, raises fixed operating costs, and increases administrative risk.”
regulatory burden heaviest on smaller firms
The report finds compliance costs— legal, administrative, reporting and licensing— consume a far greater share of revenue for small and medium businesses than for larger employers. Together, these regulations make it harder to start and grow businesses, push smaller companies out, and leave local markets with less competition.
Regulations also affect employment growth. Modeling estimates that small and mid-sized businesses in Washington lose about 2.75 jobs annually due to direct compliance costs, with an additional 3.75 jobs lost due to reduced sales.
regulations shape relocation decisions
Washington – along with Oregon, California and Colorado – ranks near the bottom for regulatory freedom, while states with lower regulatory burdens like Idaho and Utah consistently earn higher marks for business competitiveness.
The report identifies a real risk of business relocation: In roughly 75 % of viable regulatory scenarios, Washington sees more businesses leaving each year than moving in, often to nearby states with fewer regulations.
While Washington continues to attract high-tech industries and advanced manufacturing,“ many traditional and midmarket firms face strong incentives to relocate,” the report notes.
The U. S. Bureau of Labor Statistics( BLS) confirms that interstate migration – where businesses relocate to another state— is increasing. While businesses relocate for many reasons, the BLS acknowledges regulatory environment is a factor.
AWB’ s winter 2026 employer survey found a growing interest in relocation. In the survey of 400 + Washington employers, the share looking to move their business to another state nearly doubled in the last year, increasing from 9 % to 17 %. Forty-four percent of business leaders said they were considering moving their personal residence out of state. top regulated states in the u. s.
Rank State
2023 Total Reg Restrictions
1st California 420,434 2nd New York 300,095 3rd New Jersey 296,926 4th Illinois 282,040 5th Texas 274,469 6th Ohio 246,033 7th Oregon 223,579 8th Washington 201,634 9th Massachusetts 182,758 10th Louisiana 180,858
The StratAcument Report
Conservative Measure
50 % 70 %
Regulations that are duplicative or redundant
Broader Measure
Regulations that qualify as administrative“ red tape”
349 % more regulations
concerning non-store retailers
267 % more regulations
for hospitals
209 % more regulations
related to nursing and residential care facilities
winter 2026 39