Washington (June 2015)
The Washington Department of Revenue (DOR) offers a sales and use tax deferral program for qualifying manufacturing and research and development activities in certain areas. The program applies to sales and use tax on the construction, expansion, or renovation of qualified buildings and on the acquisition of qualified machinery and equipment for an eligible investment project. Investment projects must be located in counties with a certain unemployment rate or in a “community empowerment zone.”.
The purpose of the program is to promote economic stimulation, create employment opportunities, and reduce poverty in certain areas of the state. The legislature established this program to be effective solely in those areas and under circumstances where the deferral is for investments that result in the creation of a specified minimum number of jobs or investment for a qualifying project. This deferral program applies to taxes imposed on the construction of qualified buildings or acquisition of qualified machinery and equipment and requires the recipient of the deferral to maintain the manufacturing or research and development activity for an eight-year period.
To be eligible for the program, a taxpayer must submit an application to the DOR before (1) the start of construction, (2) the acquisition of machinery and equipment, and (3) the filling of qualified employment positions. Upon approval of the application, the DOR will issue a deferral certificate. The taxpayer must provide this certificate to sellers when goods or services are purchased..
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