Machinery and Equipment (M&E) Sales & Use Tax Exemption

Available To:
Manufacturers and processors for hire performing manufacturing and R&D. Testing operation for a manufacturer and processor for hire.

Qualifying Activity:
Purchase of qualifying machinery and equipment used directly for manufacturing, research and development, or testing operations.

Reporting/Documentation Requirements:

• Completion of Manufacturers’ Sales and Use Tax Exemption Certificate for vendor
• No application
• No Annual Survey/Report
• Electronic filing not required

Rural County Sales & Use Tax Deferral/Waiver for Manufacturing Facilities

Available to:
Manufacturers, R&D laboratories, commercial testing facilities, and persons conditioning vegetable seeds in a rural county, a CEZ, or county with a CEZ.

Qualifying Activity:
Certain construction and equipment purchases for new and expanding businesses.

Reporting/Documentation Requirements:

• Rural County Application for Sales & Use Tax Deferral must be filed before breaking ground on project
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31 of the following year in which the project is certified and for the following seven years.
• Electronic filing not required
  

B&O Credit for New Employees in Manufacturing and Research & Development in Rural Counties

Available to:
Manufacturers, R&D laboratories, and commercial testing facilities located in rural counties or within a CEZ.

Qualifying Activity:
Creating new employment positions/increase instate employment by 15%.

• $2,000 credit/position with annual wages/benefits of $40,000 or less; or
• $4,000 credit/position with wages/benefits of more than $40,000 annually.

Reporting/Documentation:

• Rural Area Application for B&O Tax Credit on New Employees must be filed within 90 days of filling the first qualified position.
• Annual Letter/Report due by the last day of the month immediately following the end of the four consecutive full calendar quarter period for which a credit is earned. Mailed by Department to applicants.
• Electronic filing not required.

B&O Credit for New Employees in Software Programming & Manufacturing in Rural Counties

Available to:
Businesses in rural counties that provide programming services or manufacture software.

Qualifying Activity:
Creating new employment positions.

Credit Amount:
A $1000 credit for each new qualified position. A credit is earned for up to five years, if the position is maintained.

Reporting/Documentation:

• No application
• Annual letter/report must be filed by January 30. Mailed by Department.
• Electronic filing not required

B&O Credit for Third Party Help Desk Services in Rural Counties

Available to:
Businesses in rural counties that provide third party information technology help desk services. 

Qualifying Activity:
Providing help desk services.

Reporting/Documentation:

• No application
• Annual letter/report must be filed by January 30. Mailed by Department.
  
• Electronic filing not required

Sales & Use Tax Deferral/Waiver for Corporate Headquarters Locating in Community Empowerment Zone

Available to:
Business with corporate headquarters locating in a CEZ.

Qualifying activity:

• locate within a CEZ
• invest at least $30 million in qualified buildings, tangible personal property, and fixtures, etc, including labor and planning
  
• employ at least 300 employees, each who must earn at least the annual average wage for the state for that year
  
• meet the definition of corporate headquarters as defined in RCW 82.82.010.

Reporting/Documentation Requirements:

• Corporate Headquarters Application for Sales and Use Tax Deferral can be made at any time prior to completion of construction of a qualified building or buildings, but tax liability incurred prior to the department's receipt of an application may not be deferred.
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31 of the following year in which the project is certified and for the following seven years.
• Electronic filing of all documents required
• Effective July 1, 2009

High Technology B&O Credit for R&D Spending

Available to:
Businesses conducting research and development (R&D) in Washington State in the fields of:

• Advanced computing
• Advanced materials
• Biotechnology
• Electronic device technology
• Environmental technology

Qualifying Activity:
Research and development.

Reporting/Documentation:

• No application
• Annual Survey must be filed by March 31st of the following year
• Electronic filing of all documents required

High Technology Sales & Use Tax Deferral/Waiver

Available to:
Limited to businesses conducting R&D and pilot scale manufacturing in the fields of:

• Advanced computing
• Advanced materials
• Biotechnology
• Electronic device technology
• Environmental technology

Qualifying Activity:
Certain construction and equipment purchases for new and expanding businesses.

Reporting/Documentation:

• High Technology Application For Sales and Use Tax Deferral must be filed before building permit is issued
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31st of the following year in which the project is certified and for the following seven years.
• Electronic filing not required

Biotechnology & Medical Device Manufacturing Sales & Use Tax Deferral/Waiver

Available to:
Biotechnology and medical device manufacturers.

Qualifying Activity:
Certain construction and equipment purchases for new and expanding businesses.

Reporting/Documentation:

• Biotechnology Products and Medical Devices Application For Sales and Use Tax Deferral must be filed and approved before building permit is issued
  
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31st of the following year in which the project is certified and for the following seven years.
• Electronic filing not required

Reduced B&O Tax Rate for Aerospace Businesses

Available to:
Manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers.

Qualifying Activity:
Manufacturers and Processors for Hire: Manufacturing, and sales by the manufacturer, of commercial airplanes or component parts of commercial airplanes; or tooling especially designed for use in manufacturing commercial airplanes and component parts of commercial airplanes.

FAR Repair Stations: Retail sales made by certificated FAR part 145 repair stations.

Aerospace Non-Manufacturers: Aerospace product development for others.

Reporting/Documentation:

• No application
• Annual Report must be filed by March 31 of the following year
• Electronic filing required

B&O Credit for Preproduction Development Expenditures

Available to:
Manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers.

Qualifying Activity:
Expenditures for aerospace preproduction development.

Reporting/Documentation:

• No application
• Aerospace Credit Affidavit for Preproduction Spending must be filed each reporting period the credit is taken
• Annual Report must be filed by March 31 of the following year
• Electronic filing required

B&O Credit for Property/Leasehold Taxes paid on Aerospace Manufacturing Facilities

Available to:
Manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers.

Qualifying Activity:
For Manufacturers: Payment of property/leasehold taxes on new buildings, land, the increased value of renovated buildings, and equipment eligible for the machinery and equipment (M&E) exemption that is used exclusively in manufacturing commercial airplanes or components of such airplanes; or in manufacturing tooling specifically designed for use in manufacturing commercial airplanes or components of such airplanes.

For Certificated FAR Part 145 Repair Stations and Aerospace Non-manufacturers: Payment of property/leasehold taxes on new buildings, land, the increased value of renovated buildings, and qualifying computer equipment and peripherals used exclusively in aerospace product development or in providing aerospace services.

Reporting/Documentation:

• No application
• Annual Report must be filed by March 31 of the following year
• Electronic filing required

Sales & Use Tax Exemption for Aerospace Manufacturers for Computer Hardware/Software/Peripherals

Qualifying Activity:
Purchases of computer hardware, software, and computer peripherals, and charges for labor and services related to the installation of such equipment.

Reporting/Documentation:

• Completion of Buyer's’ Retail Sales Tax Exemption Certificate for vendor
• No application
• Annual Report must be filed by March 31 of the following year
• Electronic filing required

Reduced B&O Tax Rate for Timber Extracting and Manufacturing

Available to:

• Timber extractors and extractors for hire,
• Timber manufacturers and processors for hire;
• Sales of standing timber (effective July 1, 2007).

Qualifying Activity:

• Extracting timber or extracting timber for hire
• Manufacturing or processing for hire:
  • Timber into timber products or wood products; or
  • Timber products into other timber products or wood products
• Selling at wholesale:
  • Timber extracted by the seller;
  • Timber products manufactured by the seller from timber or other timber products; and
  • Wood products manufactured by the seller from timber or timber products.
• Sales of standing timber apart of land (effective July 1, 2007)
  • Buyer required to sever timber from land within 30 months

Reporting/Documentation:

• No application required
• Annual Survey required by March 31st of the following year 
• Electronic filing of all documents required

B&O Tax Exemption for Manufacturers of Fresh Fruit & Vegetables

Available to:
Manufacturers of fresh fruit and vegetables.

Qualifying Activity:
Canning, preserving, freezing, processing, or dehydrating fresh fruits and veggies or wholesale sales when goods transported out-of-state by customer in normal course of business.

Reporting/Documentation:

• No application
• Annual Survey must be filed by March 31st of the following year
• Electronic filing of all documents required

B&O Tax Exemption for Manufacturers of Dairy and Seafood Products

Available to:
Dairy and seafood product manufacturers.

Qualifying Activity:
Manufacturing and wholesale sales of dairy and seafood products when goods are transported out of state by buyer in normal course of business.

Reporting/Documentation:

• No application
• Annual Survey must be filed by March 31st of the following year
• Electronic filing of all documents required

Sales/Use Tax Deferral/Waiver for Vegetable Seed Conditioning Facilities (Rural County Sales/Use Tax Deferral/Waiver)

Available to:
Persons conditioning vegetable seeds in a rural county, CEZ, or a county with a CEZ.

Qualifying Activity:
Certain construction and equipment purchases for new and expanding businesses.

Reporting/Documentation Requirements:

• Rural County Application for Sales & Use Tax Deferral must be filed before breaking ground on project
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31st of the following year in which the project is certified and for the following seven years.
• Electronic filing not required

Sales Tax Deferral/Waiver on Construction of Cold Storage & Certain Food Manufacturing/Processing Facilities

Available to:
Manufacturers of dairy and seafood products, fresh fruit and vegetables processors, cold storage warehousers, and research and development activities performed by these businesses.

Qualifying Activity:
Construction or expansion of facilities and purchases of qualifying machinery and equipment.

Reporting/Documentation:

• Fruit and Vegetable Businesses Application For Sales and Use Tax Deferral must be received before building permit is issued.
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31st of the following year in which the project is certified and for the following seven years.  
• Electronic filing of all documents required
• Effective July 1, 2007.

Waste Vegetable Oil – Sales/Use Tax Exemption and Special Fuel Tax Exemption on Purchases for Personal Use

Available to:
Any person that is not engaged in selling biodiesel fuel at wholesale or retail.

Qualifying Activity
Purchase of waste vegetable oil to produce biodiesel fuel for personal use. Waste vegetable oil is used cooking oil gathered from restaurants or commercial food processors.

Reporting/Documentation:

• Buyer must provide seller with Buyers’ Retail Sales Tax Exemption Certificate
• No application
• No Annual Survey/Report

Reduced B&O Tax Rate for Manufacturing E85 Motor Fuel and Wood Biomass Fuel

Available to:
Manufacturers of E85 motor fuel or wood biomass fuel.

Note: Effective July 22, 2007, “E85 motor fuel” replaces “alcohol fuel.” The B&O tax rate is 0.138%.

Qualifying Activity
Manufacturing E85 motor fuel or wood biomass fuel.

Reporting/Documentation:

• No application
• No Annual Survey/Report
• Electronic filing not required
• No expiration date
• Effective July 1, 2009, manufacturers of biodiesel fuel and biodiesel feedstock no longer qualify for the reduced rate. They must file under the general "Manufacturing" B&O tax classification of 0.484%. (RCW 82.04.260 (1)(e))

Property/Leasehold Tax Exemption for Manufacturers of Biodiesel/Alcohol Fuel, etc

Available to:
Manufacturers of alcohol fuel, biodiesel fuel, biodiesel feedstock, or wood biomass fuel.

Note: Effective July 22, 2007, “E85 motor fuel” replaces “alcohol fuel.”

Qualifying Activity
Manufacturing alcohol fuel, biodiesel fuel, biodiesel feedstock, or wood biomass fuel.

Reporting/Documentation:

• Application for exemption must be made by November 1 to local county assessor
• No Annual Survey/Report
• Electronic filing not required

B&O Tax Deduction for Sales of Biofuels

Available to:
Retail sellers and distributors of biodiesel fuel and E85 motor fuel.
Note: Effective July 22, 2007, “E85 motor fuel” replaces “alcohol fuel.”
Qualifying Activity
When calculating the B&O tax, a deduction may be claimed for amounts received from the retail sale or distribution of:

Biodiesel fuel; or

E85 motor fuel.
Reporting/Documentation:

• No application
• No Annual Survey/Report
• Electronic filing not required
• Expires July 1, 2015
• The deduction as it applies to sellers of wood biomass fuel expired July 1, 2009. (RCW 82.04.4335)

Sales/Use Tax Exemption for Machinery/Equipment, Delivery Vehicles & Construction of Facilities for Retail Sales of Biofuels

Available to:
Retail sellers of biodiesel fuel and E85 motor fuel.

Note: Effective July 22, 2007, “E85 motor fuel” replaces “alcohol fuel.”

Qualifying Activity
Purchases of machinery and equipment or services to construct structures, including charges for installing, constructing, repairing, cleaning, decorating, altering, or improving the structures or machinery and equipment, used directly for the retail sale of a biodiesel blend or E85 motor fuel.

Purchases of  fuel delivery vehicles or charges for installing, repairing, cleaning, altering, or improving the vehicles including repair parts and replacement parts if at least seventy-five percent of the fuel distributed by the vehicles is a biodiesel blend or E85 motor fuel.

Reporting/Documentation:

• Buyer’s Retail Sales Tax Exemption Certificate provided to vendor
• No application
• No Annual Survey/Report
• Electronic filing not required
• Expires July 1, 2015.

*The exemptions as they apply to retailers of wood biomass fuel expired July 1, 2009. (RCW 82.08.960 and 82.12.960)

Reduced B&O Tax Rate for Manufacturers of Semiconductor Materials

Available to:
Manufacturing or processors for hire of semiconductor materials.

Qualifying Activity
Manufacturing or processing for hire semiconductor materials. “Semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, and compound semiconductor wafers.

Reporting/Documentation:

• No application
• Annual Report must be filed by April 30th of the following year.
• Electronic filing of all documents required

Sales/Use Tax Exemption for Purchases of Semiconductor Gasses & Chemicals

Available to:
Manufacturing or processors for hire of semiconductor materials.

Qualifying Activity
Sales of gasses and chemicals used by manufacturer or processor for hire in the production of semiconductor materials. “Semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, and compound semiconductor wafers.

Effective July 1, 2009, the exemption also includes gases and chemicals used in producing:

• Silicon solar wafers
• Silicon solar cells
• Thin film solar devices
• Compound semiconductor solar wafers

Effective October 1, 2009, the above will be added to the meaning of "semiconductor materials."

Reporting/Documentation:

• Completion of Buyers’ Retail Sales Tax Exemption Certificate for vendor
• No application
• Annual Report filed by April 30th of the following year.
• Electronic filing of all documents required
• Expires December 1, 2018

Reduced B&O Tax Rate for Aluminum Smelting

Available to:
Aluminum smelters and processors for hire who manufacture aluminum in this state.

Qualifying Activity
Manufacturing aluminum and selling the same at wholesale by aluminum smelters and processors for hire.

Reporting/Documentation:

• No application
• Annual Report filed by March 31st of the following year.
• Electronic filing not required

B&O Tax Credit For State Portion of Sales Tax on Materials Used in Aluminum Smelter

Available to:
Aluminum smelters and processors for hire who manufacture aluminum in this state.

Qualifying Activity
B&O tax credit for state portion of sales tax paid on materials, equipment, labor and services used in aluminum smelter.

Reporting/Documentation:

• No application
• Person must pay the tax and may then take a credit equal to the state share of retail sales tax paid.
• Annual Report filed by March 31st of the following year.
• Electronic filing not required

B&O Tax Credit for Property Tax on Aluminum Smelter

Available to:
Aluminum smelter who manufacture aluminum in this state.

Qualifying Activity
B&O tax credit for property tax paid by aluminum smelter.  

Reporting/Documentation:

• No application
• Person must pay the tax and may then take a credit equal to the property tax paid.
• Annual Report filed by March 31st of the following year.
• Electronic filing not required

Brokered Natural Gas Use Tax Exemption

Available to:
Aluminum smelter who manufacture aluminum in this state.

Qualifying Activity
Use tax exemption for the use of natural or manufactured gas by an aluminum smelter.

Reporting/Documentation:

• No application
• Annual Report filed by March 31 of the following year.
• Electronic filing not required

Sales/Use Tax Exemption for Replacement Parts for Farm Machinery & Equipment

Available to:
Eligible farmers.

Qualifying Activity
Eligible farmers who purchase replacement parts for qualifying farm machinery and equipment.

Note: Effective July 22, 2007, includes charges for labor and services for repairing replacement parts of qualifying farm machinery and equipment

Reporting/Documentation:

• Application for Exemption Certificate for Replacement Parts for Farm Machinery and Equipment required
• Department issues Exemption Certificate for Replacement Parts for Farm Machinery and Equipment to farmer to provide vendor
• No Annual Survey/Report
• Electronic filing not required
• Proper record keeping required

Sales/Use Tax Exemption for Field Burning Equipment & Construction of Hay Sheds

Available to:
Qualified farmers.

Qualifying Activity
Purchase or use of certain equipment. The exemption is also available for materials, labor, and services for the construction of hay sheds.

Reporting/Documentation:

• Qualified farmer must provide vendor with Farmers’ Retail Sales Tax Exemption Certificate
• No Annual Survey/Report
• Electronic filing not required
• Proper record keeping required

Sales/Use Tax Exemption for Livestock Nutrient Management Equipment & Facilities

Available to:
Licensed dairies with certified dairy nutrient management plans and qualifying animal feeding operations.

Qualifying Activity:
Purchases that become an ingredient or component of existing livestock nutrient management equipment and facilities or services provided for operating, repairing, cleaning, altering, or improving this equipment and facilities.

Reporting/Documentation:

• Application for Retail Sales Tax Exemption Certificate for Livestock Nutrient Management Equipment Facilities required
• Eligible person will receive a Retail Sales Tax Exemption Certificate for Livestock Equipment Facilities to provide vendor when purchasing tax exempt property or services
• No Annual Survey/Report
• Electronic filing is not required
• Record keeping requirements

Sales/Use Tax Exemption for Anaerobic Digesters

Available to:
Businesses establishing or operating anaerobic digesters used to primarily (more than 50%) treat livestock manure.

Qualifying Activity:
Purchases of tangible personal property that becomes an ingredient or component of the anaerobic digester and charges for installing, repairing, constructing, cleaning, altering or improving the anaerobic digester . 

Reporting/Documentation:

• Application for Retail Sales Tax Exemption Certificate for Anaerobic Digesters required. Contact the Department before beginning construction of the anaerobic digester.
• Eligible applicants will be issued a Retail Sales Tax Exemption Certificate for Anaerobic Digesters to provide their vendors
• No Annual Survey/Report
• Electronic filing is not required
• Record keeping requirements

Sales/Use Tax Exemption for Farm Fuel Users

Available to:
Farmers producing agricultural products and persons providing horticultural services to farmers.

Qualifying Activity:
Purchases of diesel fuel, biodiesel fuel, or aircraft fuel.  

Reporting/Documentation:

• Buyer provides Farmers Retail Sales Tax Exemption Certificate to seller
• No Annual Survey/Report
• Electronic filing is not required

Solar Energy System and Components of Solar Energy Systems Manufacturers – Reduced B&O Tax Rate

Available to:
Manufacturers, manufacturers that sell their product at wholesale, and processors for hire of solar energy systems and specified components of solar energy systems using photovoltaic modules.

Qualifying Activity:
Reduced B&O tax rate of 0.2904% for manufacturers, manufacturers that sell their product at wholesale, and processors for hire of solar energy systems and specified components of solar energy systems using photovoltaic modules.

Effective October 1, 2009, the rate is reduced to .275% and the specified components expanded.

Reporting/Documentation:

• No application required
• Annual report must be filed by March 31st of following year
• Electronic filing not required
• Expires June 30, 2014

Machinery & Equipment Used to Generate Electricity Using Renewable Energy - Sales/Use Tax Exemption

Available to:
Anyone that generates electricity using fuel cells, sun, wind, biomass energy, tidal and wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas.

Qualifying Activity:
Effective July 1, 2009 through June 30, 2013, purchases and installation of machinery and equipment that will be used directly in a facility that generates no more than ten kilowatts of electricity using solar energy are exempt from sales/use tax.

In addition, purchases and installation of machinery and equipment used directly in generating electricity using fuel cells, sun, wind, biomass energy, tidal and wave energy, geothermal resources, anaerobic digestion, technology that converts otherwise lost energy from exhaust, or landfill gas in a facility that generates no less than one kilowatt of electricity are exempt from sales/use tax subject to the following:

• From July 1, 2009 through June 30, 2011 the exemption is 100 percent of the sales or use tax paid.
• From July 1, 2011, through June 30, 2013, the exemption is in the form of a refund from the Department of Revenue of 75 percent of sales or use tax paid. Buyer will need to pay sales tax to the seller, and then request a refund from the Department.

The Department will provide information regarding the refund process prior to July 1, 2011.

Reporting/Documentation:

• Completion of Buyers’ Retail Sales Tax Exemption Certificate for vendor
• No Annual Survey/Report 
• Electronic filing not required
• Expires June 30, 2013

Please note that previous sales/use tax exemption program under RCW 82.08.02567, 82.12.02567, and WAC 458-20-263 expired June 30, 2009.

Solar Hot Water Equipment – Sales/Use Tax Exemption (Expires June 30, 2009)

Available to:
All persons.

Qualifying Activity:

• Purchases of OG-300 rated solar water heating systems, OG-100 rated solar water heating collectors, solar heat exchangers, or differential solar controllers;
• Charges for repair and replacement parts for such equipment;
• Charges for labor and services for installing, repairing, cleaning, altering, or improving such equipment.

Reporting/Documentation:

• Completion of Buyers’ Retail Sales Tax Exemption Certificate for vendor
• No application required
• No Annual Survey/Report 
• Electronic filing not required
• Expires June 30, 2009

Energy Production Using Solar, Methane, & Wind Power - Cost Recovery Program

Available to:
Individuals, businesses, local government entities that are not in the light and power business or gas distribution business, and participants in a community solar project.

Qualifying Activity:
Except for a community solar project, participants must generate electricity on their own property with an anaerobic digester, wind generator, or solar energy system and apply to their light and power company for a payment based on kwhs produced and type of equipment used to produce the electricity.

Reporting/Documentation:

• Interested persons should contact their light and power company and find out if the company participates in the program. Light and power companies are not required to participate.
• Completion of Renewable Energy Cost Recovery Certification or Community Solar Project Renewable Energy Cost Recovery Certificate by participant
• Completion of Renewable Energy System Cost Recovery Annual Incentive Payment Application or Community Solar Project Renewable Energy System Cost Recovery Annual Incentive Payment Application due by participants to light and power business by August 1.
• No Annual Survey/Report 
• Electronic filing not required
• No incentive payments will be paid for kilowatt-hours generated after June 30, 2020.

Energy Efficient Commercial Equipment – B&O Tax Credit for Purchases

Available To:
Businesses with a gross income of less than $750,000 in the previous year.

Qualifying Activity:
Purchase of qualifying commercial equipment between July 1, 2008 and June 30, 2010.  To view a list and definition of qualifying equipment see our Special Notice.

Credit Amount:

• Credit is equal to 8.8 percent of the purchase price.
• Statewide annual cap of all taxpayers is $750,000.
• Credits are available on first-in-time basis.
• A credit earned during one calendar year may be carried over to the subsequent calendar year. 

Reporting/Documentation Requirements:

• Complete the Energy Efficient Commercial Equipment Credit Addendum and attached to excise tax return when claiming credit
• No application
• No Annual Survey/Report
• Electronic filing not required

High Mileage Hybrid and Clean Alternative Fuel Vehicles – Sales/Use Tax Exemption

Available To:
Any person.

Qualifying Activity:
Purchase or lease of a new passenger car, light duty truck, and medium duty passenger vehicle that is powered exclusively by clean alternative fuels between January 1, 2009, and December 31, 2010.

Purchase or lease of a new passenger car, light duty truck, and medium duty passenger vehicle that is powered exclusively by a high gas mileage hybrid between January 1, 2009, and July 31, 2009.  (2009 legislative change)

Qualifying hybrids remain exempt from the additional 0.3% motor vehicle sales/use tax through December 31, 2010.

Reporting/Documentation Requirements:

• No application
• No Annual Survey/Report
• Electronic filing not required
• Dealer must keep records to substantiate the exemption

Hog Fuel and Forest-Derived Biomass – B&O Tax Credit and Sales/Use Tax Exemption

Available to:
B&O credit is available to harvesters of forest-derived biomass.
Sales and use tax exemption is available on purchases of hog fuel.
“Hog fuel” is defined as wood waste and other wood residuals including forest-derived biomass. Does not include firewood or wood pellets.

Qualifying Activity:
B&O credit for harvesters of forest-derived biomass sold, transferred, or used for production of electricity, steam, heat, or biofuel.
B&O credit amount is based on harvested green ton of forest-derived biomass:

• Harvested July 1, 2010, through June 30, 2013:
• $3 per harvested green ton
• Harvested July 1, 2013, through June 30, 2015:
• $5 per harvested green ton

Sales and use tax exemption on purchases of hog fuel to produce electricity, steam, heat, or biofuel.

Reporting/Documentation:

• Completion of Buyers’ Retail Sales Tax Exemption Certificate by purchaser of hog fuel for vendor
• No application required
• No Annual Survey/Report 
• Electronic filing not required
• Sales/use tax exemptions expires June 30, 2013

Remittance of State Sales Tax for Warehouses, Distribution Centers, Grain Elevators, Cold Storage

Available to:
Wholesalers or third-party warehousers who own or operate warehouses, grain elevators, and cold storage warehouses and retailers who own or operate distribution centers.

Qualifying Activity:
Sales tax paid on:

• Construction of a 200,000 square foot warehouse or distribution center or a grain elevator with a one million bushel capacity
• Construction or expansion of a cold storage warehouse by at least 25,000 square feet (effective July 1, 2007)

Reporting/Documentation:

• Application For Remittance filed each quarter with the Department
• No Annual Survey/Report 
• Electronic filing not required

Sales Tax Deferral/Waiver on Construction of Cold Storage & Certain Food Manufacturing/Processing Facilities

Available to:
Manufacturers of dairy and seafood products, fresh fruit and vegetables processors, cold storage warehousers, and research and development activities performed by these businesses.

Qualifying Activity:
Construction or expansion of facilities and purchases of qualifying machinery and equipment. There is no minimum square footage requirement for this program.

Reporting/Documentation:

• Fruit and Vegetable Businesses Application For Sales and Use Tax Deferral must be received before building permit is issued.
• All businesses must maintain a qualified activity at the site of the investment project for the year in which the investment project is certified operationally complete plus seven additional years.
• Annual Survey must be filed by March 31st of the following year in which the project is certified and for the following seven years.  
• Electronic filing of all documents required
• Effective July 1, 2007.

Sales/Use Tax Exemption for Motion Picture and Video Production Companies on Rental of Production Equipment and Purchase of Production Services

Available to:
Motion picture and video production companies.

Qualifying Activity:
Rental of production equipment  and purchase of production services by motion picture and video production companies.

Reporting/Documentation:

• Purchaser provides seller with completed Motion Picture And Video Production Business Exemption Certificate or Buyer’s Retail Sales Tax Exemption Certificate
• No application required
• No Annual Survey/Report 

Gas Stations - B&O Tax Credit for Purchases of Alternative Power Generation Devices

Available to:
Businesses that sell motor vehicle fuel or special fuel from a gas station or facility with 4 or more pumps.

Qualifying Activity:
Purchase alternative power generation device.  Business must purchase equipment and take credit between July 1, 2008 and June 30, 2011.

Reporting/Documentation:

• No application
• No annual survey
• Electronic filing not required

Commute Trip Reduction Program – B&O Tax/Public Utility Tax Credit

Available to:
Employers and property managers.

Qualifying Activity:
Employers and property managers who provide commute trip reduction incentives to or on behalf of their own or other employees. 

Reporting/Documentation:

• Commute Trip Reduction Credit Annual Application required between January 1 and January 31st following year applicant made commute trip reduction incentive payments
• No Annual Survey/Report 
• Electronic filing not required

Remittance of State Sales Tax for Warehouses, Grain Elevators, Distribution Centers, Cold Storage

Available to:
Wholesalers or third-party warehousers who own or operate warehouses, grain elevators, and cold storage warehouses and retailers who own or operate distribution centers.

Qualifying Activity:
Sales tax paid on:

• Construction of a 200,000 square foot warehouse or distribution center or a grain elevator with a one million bushel capacity
• Construction or expansion of a cold storage warehouse by at least 25,000 square feet (effective July 1, 2007)

Reporting/Documentation:

• Application For Remittance filed each quarter with the Department
• No Annual Survey/Report 
• Electronic filing not required

Main Street Tax Credit – B&O Tax/Public Utility Tax Credit

Available to:
All businesses that make qualified contributions.

Qualifying Activity:
Contributions made to approved:

• designated revitalization programs, or
• the Main Street Trust Fund

 Reporting/Documentation:

• Application through E-file required before making a contribution
• No Annual Survey/Report 
• Electronic filing of all documents required

International Services – B&O Tax Credit for new employment

Available to:
Persons providing international services, such as computer; data processing; information; legal; accounting and tax preparation; engineering; architectural; business consulting; business management; public relations and advertising; surveying; geological consulting; real estate appraisal; or financial services in designated geographical areas.

Qualifying Activity:
Creating permanent full-time positions in international services located in a Community Empowerment Zone (CEZ) or designated International Services District. International services must be provided to persons domiciled outside the United States or be for use primarily outside this country.

Credit Amount:
$3,000 per year for each qualified employment position created. Additionally, $3,000 in credit can be taken in each of the following four years if the position is maintained.

Reporting/Documentation:

• No application
• No Annual Survey/Report 
• Electronic filing not required
• Maintain records necessary for the department to verify eligibility:
• Employment records for the previous six years;
  • Information relating to description of international service activity engaged in at the eligible location by the person; and
  • Information relating to customers of international service activity engaged in at that location by the person.

Washington Customized Employment Training Program – B&O Tax Credit  

Available to:
All Washington employers.

Qualifying Activity:
Payments to the Employment Training Finance Account through the Customized Employment Training Program for customized employee training.

Reporting/Documentation:

• Application with the State Board of Community and Technical Colleges for training allowance
• Employment Credit Training Worksheet must be filed when claiming credit on return
• Annual survey required by March 31st of the following year.
• Electronic filing not required

WashingtonFilmWorks Contributors B&O Tax Credit (formerly Motion Picture Competitiveness Program)

Available to:
All businesses that make qualified contributions.

Qualifying Activity:
Contributions made to WashingtonFilmWorks (an approved Motion Picture Competitiveness Program).

Reporting/Documentation:

• Contributions must be made before credit is claimed
• No application required
• No Annual Survey/Report 
• Electronic filing of all documents required

Pubic Utility Tax Credit for Contributions to a Rural Economic Development Revolving Fund

Available to:
Light and power businesses.

Qualifying Activity:
Contributions by a light and power business to an Electric Utility Rural Economic Development Revolving Fund.

Reporting/Documentation:

• Public Utility Tax Credit for Contributions to an Electric Utility  Rural Economic Development Revolving Fund is required before claiming credit
• No Annual Survey/Report 
• Electronic filing not required

Weatherization Assistance Program – Sales/Use Tax Exemption

Available to:
Community Trade and Economic Development (CTED) weatherization program contractors.

Qualifying Activity:
Purchase of tangible personal property that becomes a component part of a qualifying residence under the weatherization program administered by CTED.

Examples of qualifying weatherization materials
include, but are not limited to the following:

• Insulation and sealants
• Parts for air infiltration
• Heating and cooling equipment
• Supplies used to seal and repair ducts

Please note: Charges for labor and services used to install these materials continue to be subject to sales tax and use tax.

Reporting/Documentation:

• Completion of Buyers’ Retail Sales Tax Exemption Certificate by contractor for vendor. Check 5(o).
• No application required
• No Annual Survey/Report 

Power for Electrolyte Processing – Public Utility Tax Exemption

Available to:
Light and power businesses that provide electricity to electrolytic processing businesses.

Qualifying Activity:
Public Utility Tax exemption on sales of electricity made by a light and power business to a chlor-alkali electrolytic processing business or a sodium chlorate electrolytic processing business for the electrolytic process if the contract for sale of electricity to the business contains the following terms:

(a) The electricity to be used in the electrolytic process is separately metered from the electricity used for general operations of the business;

(b) The price charged for the electricity used in the electrolytic process will be reduced by an amount equal to the tax exemption available to the light and power business under this section; and

(c) Disallowance of all or part of the exemption under this section is a breach of contract and the damages to be paid by the chlor-alkali electrolytic processing business or the sodium chlorate electrolytic processing business are the amount of the tax exemption disallowed.

Reporting/Documentation:

• Completion of Public Utility Tax Exemption Certificate For Persons Supplying Power to Electrolytic Processor by buyer and seller
• Annual Report required by March 31st the following year
• Electronic filing not required