Officials made the detemination after a survey team visited the area and talked with witnesses.
"Despite the impressive photos and videos, the team found no evidence the funnel touched down near the honor farm just south of the Monroe Correctional Facility," the National Weather Service said in a statement.
The Weather Service statement, posted on its website, said the funnel was visible for nearly 10 minutes.
A second, almost horizontal, funnel cloud also appeared as the initial one dissipated - but lasted for only about a minute, the Weather Service said.
Meteorologists initially thought the funnel cloud touched down as a tornado, said Brad Colman, meteorologist in charge of the regional National Weather Service, but that was disproved by closer examination.
Area residents began reporting sightings of the funnel cloud just after 5 p.m. Friday.
"At first, it was huge. I couldn't believe what I was seeing," said a witness named Lisa, who spotted it while driving on State Route 522 heading toward Woodinville.
"It was pretty big. I was pretty impressed with the size," said Brian Walters, another witness.
Walters said he tried to chase after the funnel cloud before it dissipated.
"I got down in the valley. There were cars pulling over pretty much everywhere, and they were looking at it. People were stopping, taking pictures. Just in awe, basically," he said. "Looked like it was touching down to me."
"It was pretty big. It was amazing," said Lisa.
There were no reports of injuries or damage.
Washington averages about two tornadoes a year somewhere in the state. One has been recorded so far this year in an earlier storm.
That tornado struck just outside Moses Lake on May 19. That one was rated an EF-0 on the Enhanced Fujita Scale that classifies tornado intensity. Zero is the lowest rung on the scale.
There has only been one deadly tornado ever recorded in Washington or Oregon history. An F-3 tornado killed 6 and injured 300 in Vancouver, Washington in April 1972.