title: RCW 82.04.43393

text:
(1) In computing tax there may be deducted from the measure of tax, amounts that a qualified employer of record engaged in providing paymaster services receives from an affiliated business to cover employee costs of a qualified employee. However, no exclusion is allowed under this section for any employee costs incurred in connection with a contractual obligation of the taxpayer to provide services, including staffing services as defined in RCW 82.04.540.
(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Affiliated" has the same meaning as provided in RCW 82.32.655(7).
(b) "Employee costs" are the actual cost of wages and salaries, benefits, workers' compensation, payroll taxes, withholding, or other assessments paid to or on behalf of an employee.
(c) "Functional employment relationship" means having control over the work schedule and activities of the employees and control over all employment decisions such as salary, discipline, hiring, or layoffs.
(d) "Paymaster services" means providing payroll and related human resource services.
(e) "Qualified employee" means an employee with whom the affiliated business has a functional employment relationship. Neither the employer of record, nor any other affiliate, may have a functional employment relationship with the employee.
(f) "Qualified employer of record" is a person who:
(i) Has no functional employment relationship with a qualified employee; and
(ii) Has no contractual liability with a qualified employee for the employee costs. A qualified employer of record may have statutory or common law liability to the qualified employees or to third parties for employee costs.
(3) RCW 82.32.805(1) does not apply to the deduction authorized in this section.
[ 2013 2nd sp.s. c 13 s 102.]
Notes:
Findings—Intent—2013 2nd sp.s. c 13: "(1) The legislature finds that the supreme court's decision in William Rogers v. Tacoma, while clarifying the taxation of temporary staffing agencies, resulted in differing interpretations of regulatory requirements in order to qualify for a pass-through exclusion from Washington B&O taxes for payroll reimbursements made within an affiliated group.
(2) The legislature passed Second Engrossed Substitute Senate Bill No. 6143 during the 2010 legislative session that directed the department of revenue to conduct a review and provide a report on the state's tax policies with respect to the taxation of intercompany transactions. The report affirms that centralized payroll reporting systems can result in an additional layer of tax for Washington businesses. Exclusions for payroll reimbursements allow businesses to have efficient administrative costs without incurring an additional tax obligation resulting exclusively from streamlining payroll processes. Further, this treatment of allowing for an exclusion of payroll cost reimbursements within a centralized payroll system is consistent with historical tax practices of the department of revenue prior to the William Rogers decision.
(3) The department of revenue continues to work with taxpayers to study taxation of transactions within and between affiliated business organizations in order to determine the appropriate policies and to identify areas where statutory and regulatory changes may be necessary.
(4) The legislature finds that the tax policy of allowing exclusions for payroll cost reimbursements within a centralized payroll reporting system is appropriate and should be affirmed. The legislature adopts the historical tax policy of allowing exclusions for payroll cost reimbursements within a centralized payroll reporting system of an affiliated group and requires the implementation of such tax policy from October 1, 2013. In affirming this tax policy, the legislature also intends to monitor these transactions to ensure they are being used appropriately and not for tax avoidance purposes and to monitor the potential impact on state revenue collections. The legislature does not intend for part I of this act to retroactively create a right of refund for taxes paid on payroll cost reimbursements prior to the enactment of this statute." [ 2013 2nd sp.s. c 13 s 101.]
Effective date—2013 2nd sp.s. c 13: "Except as otherwise provided in this act, this act takes effect October 1, 2013." [ 2013 2nd sp.s. c 13 s 1904.]

catchline: Deductions—Paymaster services.


doc_type: statute

jurisdiction: wa

title: RCW 82.04.43395

text:
(1) An accountable community of health may deduct from the measure of tax delivery system reform incentive payments, medicaid transformation project funding, or both, distributed by the Washington state health care authority, as described in Sec. 1115 medicaid demonstration project number 11-W-00304/0, as approved by the centers for medicare and medicaid services in accordance with Sec. 1115(a) of the social security act.
(2) A hospital that is owned by a municipal corporation or political subdivision, or a hospital that is affiliated with a state institution, may deduct from the measure of tax either or both of the following:
(a) Incentive payments received through the medicaid quality improvement program established through 42 C.F.R. 438.6(b)(2);
(b) Delivery system reform incentive payments, medicaid transformation project funding, or both, received through the project described in Sec. 1115 medicaid demonstration project number 11-W-00304/0, approved by the centers for medicare and medicaid services in accordance with Sec. 1115(a) of the social security act.
(3) Managed care organizations may deduct from the measure of tax the incentive payments received for achieving quality performance standards established through 42 C.F.R. 438.6(b)(2), as existing on July 28, 2019.
(4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Accountable community of health" means a regional nonprofit designated by the health care authority to work together with the health care delivery system, health plans, public health, social services, community-based organizations, the justice system, schools, tribal partners, and local government leaders to improve the health equity of their communities as part of Sec. 1115 medicaid demonstration project number 11-W-00304/0.
(b) "Managed care organization" has the same meaning as provided in RCW 74.60.010.
[ 2023 c 313 s 1; 2019 c 350 s 1; 2018 c 102 s 2.]
Notes:
Tax preference performance statement exemption—Automatic expiration date exemption—2023 c 313: "RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2023 c 313 s 2.]
Application—2019 c 350: "The deductions in section 1 of this act apply only with respect to amounts received on or after July 28, 2019, by a hospital that is owned by a municipal corporation or political subdivision, a hospital that is affiliated with a state institution, or a managed care organization." [ 2019 c 350 s 2.]
Automatic expiration date and tax preference performance statement exemption—2019 c 350: "The provisions of RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2019 c 350 s 3.]
Effective date—2018 c 102: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [March 15, 2018]." [ 2018 c 102 s 5.]
Application—2018 c 102: "The deductions in section 2 of this act apply only with respect to amounts received on or after March 15, 2018, by an accountable community of health or a hospital that is owned by a municipal corporation or political subdivision." [ 2018 c 102 s 3.]
Tax preference performance statement—2018 c 102: "(1) This section is the tax preference performance statement for the tax preference contained in section 2, chapter 102, Laws of 2018. The performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to reduce structural inefficiencies in the tax structure under RCW 82.32.808(2)(d).
(3) The legislature acknowledges the importance of accountable communities of health under *RCW 41.05.800 in aligning actions to achieve healthy communities and populations, improving health care quality, and lowering costs. It is the legislature's intent to remedy inconsistencies in the tax structure by allowing accountable communities of health to deduct certain funds as amounts subject to business and occupation tax in order to ensure accountable communities of health receive tax relief similar to other nonprofit or public-private health care organizations." [ 2018 c 102 s 1.]
*Reviser's note: RCW 41.05.800 expired July 1, 2020, pursuant to 2014 c 223 s 21.
Tax preference performance statement requirement and automatic expiration date exemption—2018 c 102: "The provisions of RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2018 c 102 s 4.]

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Deductions—Accountable community of health.

code: rcw

unit: section

court: Washington State Legislature


title: RCW 82.04.43396

text:
(1) In computing tax under RCW 82.04.290(2), a seller may deduct from the measure of tax the amount of scan-down allowances.
(2) For purposes of this section, a provision that the seller must sell at a certain retail price or a specific price reduction does not constitute either:
(a) A service provided by the seller to the manufacturer or wholesaler; or
(b) A business activity directly or indirectly benefiting the manufacturer or wholesaler.
(3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Product" means:
(i) Food and food ingredients other than prepared food, as those terms are defined in RCW 82.08.0293, whether or not exempt from sales tax under RCW 82.08.0293; and
(ii) Pet food and specialty pet food as defined in RCW 15.53.901.
(b) "Scan-down allowance" means a payment or credit offered to a seller by a manufacturer or wholesaler of products, where:
(i) The amount of the payment or credit is based on the quantity of the product to be sold at retail by the seller within a specified period of time;
(ii) The seller knew the terms of the offer before making the sales that generated the payment or credit from the manufacturer or wholesaler; and
(iii) The seller is not required to provide any services to the manufacturer or wholesaler or engage in any business activities directly or indirectly benefiting the manufacturer or wholesaler, in order to receive the payment or credit from the manufacturer or wholesaler.
[ 2019 c 217 s 1.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2019 c 217: "The provisions of RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2019 c 217 s 2.]

catchline: Deductions—Scan-down allowances.


title: RCW 82.04.43397

text:
(1) In computing the tax under RCW 82.04.290(4), a processor may deduct from the measure of the tax amounts retained by persons other than the processor in the following forms:
(a) Interchange fees;
(b) Network fees; and
(c) Portions of fees retained by other processors.
(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Acquirer" means a person that contracts directly or indirectly with a merchant to provide settlement for the merchant's electronic transactions over a payment card network. "Acquirer" does not include a person that acts only as a processor for the services it provides to the merchant.
(b) "Interchange fee" means an amount received by an issuer with respect to the interchange of a transaction conducted by a merchant.
(c) "Issuer" means any person that authorizes the use of a card to perform an electronic transaction.
(d) "Network fees" means fees received by payment networks associated with the processing of a transaction or with the acceptance of the payment network's brand.
(e) "Payment network" means an entity that directly or indirectly provides the proprietary services, infrastructure, and software that route information and data to an issuer from an acquirer to conduct the authorization, clearance, and settlement of electronic transactions; and a merchant uses in order to accept as a form of payment a brand of card or other device that may be used to carry out electronic transactions.
(f) "Processor" means a person, including an acquirer or issuer, that processes or routes electronic transactions for issuers, acquirers, or merchants.
[ 2025 c 401 s 2.]
Notes:
Intent—2025 c 401: "The unique nature of payment system arrangements distinguishes payment card processors from other taxpayers. Due to the unique nature of processors' activities related to interchange fees and network fees, the legislature intends to address the business and occupation taxation of processors' activities on a prospective basis through the deduction and rate authorized in this act. The legislature does not intend for inferences as to the taxability of prior periods to be drawn from the passage of this act." [ 2025 c 401 s 1.]
Tax preference performance statement exemption—Automatic expiration date exemption: "RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2025 c 401 s 6.]
Effective date—2025 c 401: "This act takes effect January 1, 2026." [ 2025 c 401 s 7.]

catchline: Deductions—Processors of electronic transactions.


title: RCW 82.04.436

text:
(1)(a) Subject to the limits and provisions of this section, a credit is allowed against the tax otherwise due under this chapter for persons engaged in the manufacturing of alternative jet fuel.
(b) Except as provided in (c) of this subsection, the credit under this section is equal to $1 for each gallon of alternative jet fuel that has at least 50 percent less carbon dioxide equivalent emissions than conventional petroleum jet fuel and is sold during the prior calendar year by:
(i) A business that produces alternative jet fuel and is located in a qualifying county; or
(ii) A business's designated alternative jet fuel blender that is located in this state.
(c) The credit amount under (b) of this subsection must increase by 2 cents for each additional one percent reduction in carbon dioxide equivalent emissions beyond 50 percent, not to exceed $2 for each gallon of alternative jet fuel.
(d) A person may not receive credit under both (b)(i) and (ii) of this subsection.
(e) The credit under this section is calculated only on the portion of jet fuel that is considered alternative jet fuel and does not include conventional petroleum jet fuel when such fuels are blended or otherwise used in a jet fuel mixture.
(f) A credit under this section may not be claimed until the department of ecology verifies that there are one or more facilities operating in this state with cumulative production capacity of at least 20,000,000 gallons of alternative jet fuel each year and has provided such notice to the department.
(g) Contract pricing for sales of alternative jet fuel between a person claiming the credit under this section and the final consumer must reflect the per gallon credit under (b) and (c) of this subsection.
(h) A credit under this section may not be claimed until the department of ecology, in consultation with the department of archaeology and historic preservation, verifies that the person applying for the credit is not engaged in the manufacturing of alternative jet fuel on the footprint of a structure listed with the department of archaeology and historic preservation as a historic cemetery or tribal burial grounds as per chapter 27.44 or 68.60 RCW. If the department of ecology has not made a determination within 60 days of the person requesting verification under this subsection, the application is deemed to be verified.
(2) A person may not receive credit under this section for amounts claimed as credits under RCW 82.04.4361 or chapter 82.16 RCW.
(3) To claim a credit under this section a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department.
(4) To claim a credit under this section, the person applying must:
(a) Complete an application for the credit which must include:
(i) The name, business address, and tax identification number of the applicant;
(ii) Documentation of the total amount of alternative jet fuel manufactured and sold in the prior calendar year;
(iii) Documentation sufficient for the department to verify that the alternative jet fuel for which the credit is being claimed meets the definition in RCW 82.04.287(3) and the carbon intensity reduction benchmarks under subsection (1)(b) and (c) of this section, as certified by the department of ecology under chapter 70A.535 RCW;
(iv) Documentation sufficient to verify compliance with subsection (1)(g) of this section; and
(v) Any other information deemed necessary by the department to support administration or reporting of the program.
(b) Obtain a carbon intensity score from the department of ecology prior to submitting an application to the department.
(5) The department must notify applicants of credit approval or denial within 60 days of receipt of a final application and documentation.
(6) If a person fails to supply the information as required in subsection (4) of this section, the department must deny the application.
(7)(a) The credit under this section may only be claimed against taxes due under RCW 82.04.287, less any taxable amount for which a credit is allowed under RCW 82.04.440.
(b) A credit earned during one calendar year may be carried over and claimed against taxes incurred for the next subsequent calendar year but may not be carried over for any calendar year thereafter.
(c) No refunds may be granted for credits under this section.
(8) For the purposes of this section:
(a) "Alternative jet fuel" has the same meaning as in RCW 70A.535.010.
(b) "Carbon dioxide equivalent" has the same meaning as in RCW 70A.45.010.
(c) "Qualifying county" means a county that has a population less than 650,000 at the time an application for a credit under this section is received by the department.
(9)(a) Credits may be earned beginning on the first day of the first calendar quarter following the month in which notice under subsection (1)(f) of this section was received by the department.
(b) Credits may not be earned beginning nine calendar years after the close of the calendar year in which the credit may be earned, as provided in (a) of this subsection.
(10) A person claiming the credit provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
[ 2023 c 232 s 10.]
Notes:
Tax preference performance statement—Effective date—2023 c 232 ss 9-12: See notes following RCW 82.04.287.
Intent—2023 c 232: See note following RCW 70A.535.010.
Automatic expiration date exemption—2023 c 232: See note following RCW 82.04.287.

catchline: Credit—Manufacture of alternative jet fuel.


title: RCW 82.04.4361

text:
(1)(a) Subject to the limits and provisions of this section, a credit is allowed against the tax otherwise due under this chapter for persons engaged in the use of alternative jet fuel.
(b) Except as provided in (c) of this subsection, the credit under this section is equal to $1 for each gallon of alternative jet fuel that has at least 50 percent less carbon dioxide equivalent emissions than conventional petroleum jet fuel and is purchased during the prior calendar year by a business for use as alternative jet fuel for flights departing in this state.
(c) The credit amount under (b) of this subsection must increase by 2 cents for each additional one percent reduction in carbon dioxide equivalent emissions beyond 50 percent, not to exceed $2 for each gallon of alternative jet fuel.
(d) The credit under this section is calculated only on the portion of jet fuel that is considered alternative jet fuel and does not include conventional petroleum jet fuel when such fuels are blended or otherwise used in a jet fuel mixture.
(e) A credit under this section may not be claimed until the department of ecology verifies that there are one or more facilities operating in this state with cumulative production capacity of at least 20,000,000 gallons of alternative jet fuel each year and has provided such notice to the department.
(2) A person may not receive credit under this section for amounts claimed as credits under RCW 82.04.436 or chapter 82.16 RCW.
(3) To claim a credit under this section a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department.
(4) To claim a credit under this section, the person applying must:
(a) Complete an application for the credit which must include:
(i) The name, business address, and tax identification number of the applicant;
(ii) Documentation of the amount of alternative jet fuel purchased by the business in the prior calendar year;
(iii) Documentation sufficient for the department to verify that the alternative jet fuel for which the credit is being claimed meets the definition in RCW 82.04.287(3) and the carbon intensity reduction benchmarks under subsection (1)(b) and (c) of this section, as certified by the department of ecology under chapter 70A.535 RCW; and
(iv) Any other information deemed necessary by the department to support administration or reporting of the program.
(b) Obtain a carbon intensity score from the department of ecology prior to submitting an application to the department.
(5) The department must notify applicants of credit approval or denial within 60 days of receipt of a final application and documentation.
(6) If a person fails to supply the information as required in subsection (4) of this section, the department must deny the application.
(7)(a) The credit under this section may be used against any tax due under this chapter.
(b) A credit earned during one calendar year may be carried over and claimed against taxes incurred for the next subsequent calendar year but may not be carried over for any calendar year thereafter.
(c) No refunds may be granted for credits under this section.
(8) For the purposes of this section:
(a) "Alternative jet fuel" has the same meaning as in RCW 70A.535.010.
(b) "Carbon dioxide equivalent" has the same meaning as in RCW 70A.45.010.
(9)(a) Credits may be earned beginning on the first day of the first calendar quarter following the month in which notice under subsection (1)(e) of this section was received by the department.
(b) Credits may not be earned beginning nine calendar years after the close of the calendar year in which the credit may be earned, as provided in (a) of this subsection.
(10) A person claiming the credit provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
[ 2023 c 232 s 11.]
Notes:
Tax preference performance statement—Effective date—2023 c 232 ss 9-12: See notes following RCW 82.04.287.
Intent—2023 c 232: See note following RCW 70A.535.010.
Automatic expiration date exemption—2023 c 232: See note following RCW 82.04.287.

catchline: Credit—Alternative jet fuel.


title: RCW 82.04.440

text:
(1) Every person engaged in activities that are subject to tax under two or more provisions of RCW 82.04.230 through 82.04.298, inclusive, is taxable under each provision applicable to those activities.
(2) Persons taxable under RCW 82.04.2909(2), 82.04.250, 82.04.270, 82.04.294(2), or 82.04.260 (1)(b), (c), or (d), (4), (11), or (12) with respect to selling products in this state, including those persons who are also taxable under RCW 82.04.261, are allowed a credit against those taxes for any (a) manufacturing taxes paid with respect to the manufacturing of products so sold in this state, and/or (b) extracting taxes paid with respect to the extracting of products so sold in this state or ingredients of products so sold in this state. Extracting taxes taken as credit under subsection (3) of this section may also be taken under this subsection, if otherwise allowable under this subsection. The amount of the credit may not exceed the tax liability arising under this chapter with respect to the sale of those products.
(3) Persons taxable as manufacturers under RCW 82.04.240 or 82.04.260 (1)(b) or (12), including those persons who are also taxable under RCW 82.04.261, are allowed a credit against those taxes for any extracting taxes paid with respect to extracting the ingredients of the products so manufactured in this state. The amount of the credit may not exceed the tax liability arising under this chapter with respect to the manufacturing of those products.
(4) Persons taxable under RCW 82.04.230, 82.04.240, 82.04.2909(1), 82.04.294(1), 82.04.2404, or 82.04.260 (1), (2), (4), (11), or (12), including those persons who are also taxable under RCW 82.04.261, with respect to extracting or manufacturing products in this state are allowed a credit against those taxes for any (i) gross receipts taxes paid to another state with respect to the sales of the products so extracted or manufactured in this state, (ii) manufacturing taxes paid with respect to the manufacturing of products using ingredients so extracted in this state, or (iii) manufacturing taxes paid with respect to manufacturing activities completed in another state for products so manufactured in this state. The amount of the credit may not exceed the tax liability arising under this chapter with respect to the extraction or manufacturing of those products.
(5) For the purpose of this section:
(a) "Gross receipts tax" means a tax:
(i) Which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which the deductions allowed would not constitute the tax an income tax or value added tax; and
(ii) Which is also not, pursuant to law or custom, separately stated from the sales price.
(b) "State" means (i) the state of Washington, (ii) a state of the United States other than Washington, or any political subdivision of such other state, (iii) the District of Columbia, and (iv) any foreign country or political subdivision thereof.
(c) "Manufacturing tax" means a gross receipts tax imposed on the act or privilege of engaging in business as a manufacturer, and includes (i) the taxes imposed in RCW 82.04.240, 82.04.2404, 82.04.2909(1), 82.04.260 (1), (2), (4), (11), and (12), and 82.04.294(1); (ii) the tax imposed under RCW 82.04.261 on persons who are engaged in business as a manufacturer; and (iii) similar gross receipts taxes paid to other states.
(d) "Extracting tax" means a gross receipts tax imposed on the act or privilege of engaging in business as an extractor, and includes (i) the tax imposed on extractors in RCW 82.04.230 and 82.04.260(12); (ii) the tax imposed under RCW 82.04.261 on persons who are engaged in business as an extractor; and (iii) similar gross receipts taxes paid to other states.
(e) "Business," "manufacturer," "extractor," and other terms used in this section have the meanings given in RCW 82.04.020 through 82.04.212 [ 82.04.217], notwithstanding the use of those terms in the context of describing taxes imposed by other states.
[ 2011 c 2 s 205 (Initiative Measure No. 1107, approved November 2, 2010); 2010 1st sp.s. c 23 s 513. Prior: 2006 c 300 s 8; 2006 c 84 s 6; (2007 c 54 s 10 expired July 22, 2007); 2005 c 301 s 3; prior: 2004 c 174 s 5; 2004 c 24 s 7; 2003 2nd sp.s. c 1 s 6; 1998 c 312 s 9; 1994 c 124 s 4; 1987 2nd ex.s. c 3 s 2; 1985 c 190 s 1; 1981 c 172 s 5; 1967 ex.s. c 149 s 16; 1965 ex.s. c 173 s 12; 1961 c 15 s 82.04.440; prior: 1959 c 211 s 3; 1951 1st ex.s. c 9 s 1; 1950 ex.s. c 5 s 2; 1949 c 228 s 2-A; 1943 c 156 s 3; 1941 c 178 s 3; 1939 c 225 s 3; 1937 c 227 s 3; 1935 c 180 s 6; Rem. Supp. 1949 s 8370-6.]
Notes:
Findings—Construction—2011 c 2 (Initiative Measure No. 1107): See notes following RCW 82.08.0293.
Effective date—2010 1st sp.s. c 23: See note following RCW 82.04.4292.
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Contingent expiration date—2007 c 54 s 10: "Section 10 of this act expires if the contingency in section 29 of this act occurs." [ 2007 c 54 s 31.] The contingency in section 29, chapter 54, Laws of 2007 occurred on December 1, 2006.
Effective dates—Contingent effective date—2006 c 300: See note following RCW 82.04.261.
Effective date—2006 c 84 ss 2-8: See note following RCW 82.04.2404.
Findings—Intent—2006 c 84: See note following RCW 82.04.2404.
Findings—Intent—Effective date—2005 c 301: See notes following RCW 82.04.294.
Effective date—2004 c 174: See note following RCW 82.04.2908.
Intent—Effective date—2004 c 24: See notes following RCW 82.04.2909.
Finding—2003 2nd sp.s. c 1: See note following RCW 82.04.4461.
Effective date—Savings—1998 c 312: See notes following RCW 82.04.332.
Retroactive application—1994 c 124: "Except as otherwise provided in section 6 of this act, section 4 of this act applies retrospectively to all tax reporting periods on or after June 23, 1987." [ 1994 c 124 s 7.]
Legislative findings and intent—1987 2nd ex.s. c 3: "The legislature finds that the invalidation of the multiple activities exemption contained in RCW 82.04.440 by the United States Supreme Court now requires adjustments to the state's business and occupation tax to achieve constitutional equality between Washington taxpayers who have conducted and will continue to conduct business in interstate and intrastate commerce. It is the intent of chapter 3, Laws of 1987 2nd ex. sess. and sections 4 through 7 of this act to preserve the integrity of Washington's business and occupation tax system and impose only that financial burden upon the state necessary to establish parity in taxation between such taxpayers.
Thus, chapter 3, Laws of 1987 2nd ex. sess. and sections 4 through 7 of this act extends [extend] the system of credits originated in RCW 82.04.440 in 1985 to provide for equal treatment of taxpayers engaging in extracting, manufacturing or selling regardless of the location in which any of such activities occurs. It is further intended that RCW 82.04.440, as amended by section 2, chapter 3, Laws of 1987 2nd ex. sess. and sections 4 through 7 of this act, shall be construed and applied in a manner that will eliminate unconstitutional discrimination between taxpayers and ensure the preservation and collection of revenues from the conduct of multiple activities in which taxpayers in this state may engage." [ 1994 c 124 s 5; 1987 2nd ex.s. c 3 s 1.]
Application to prior reporting periods—1987 2nd ex.s. c 3:"If it is determined by a court of competent jurisdiction, in a judgment not subject to review, that relief is appropriate for any tax reporting periods before August 11, 1987, in respect to RCW 82.04.440 as it existed before August 11, 1987, it is the intent of the legislature that the credits provided in RCW 82.04.440 as amended by section 2, chapter 3, Laws of 1987 2nd ex. sess. and section 4 of this act shall be applied to such reporting periods and that relief for such periods be limited to the granting of such credits." [ 1994 c 124 s 6; 1987 2nd ex.s. c 3 s 3.]
Severability—1987 2nd ex.s. c 3: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1987 2nd ex.s. c 3 s 4.]
Severability—1985 c 190: "If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected." [ 1985 c 190 s 8.]
Effective dates—1981 c 172: See note following RCW 82.04.240.

catchline: Credit—Persons taxable on multiple activities.


title: RCW 82.04.4451

text:
(1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due under this chapter, as provided in this section. Except for taxpayers that report at least 50 percent of their taxable amount under RCW 82.04.255, 82.04.290(2)(a), 82.04.285, and 82.04.405, the maximum credit for a taxpayer for a reporting period is $55 multiplied by the number of months in the reporting period, as determined under RCW 82.32.045. For a taxpayer that reports at least 50 percent of its taxable amount under RCW 82.04.255, 82.04.290(2)(a), 82.04.285, and 82.04.405, the maximum credit for a reporting period is $160 multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.
(2) When the amount of tax otherwise due under this chapter is equal to or less than the maximum credit, a credit is allowed equal to the amount of tax otherwise due under this chapter.
(3) When the amount of tax otherwise due under this chapter exceeds the maximum credit, a reduced credit is allowed equal to twice the maximum credit, minus the tax otherwise due under this chapter, but not less than zero.
(4) The department may prepare a tax credit table consisting of tax ranges using increments of no more than five dollars and a corresponding tax credit to be applied to those tax ranges. The table shall be prepared in such a manner that no taxpayer will owe a greater amount of tax by using the table than would be owed by performing the calculation under subsections (1) through (3) of this section. A table prepared by the department under this subsection must be used by all taxpayers in taking the credit provided in this section.
[ 2026 c 250 s 7; 2022 c 295 s 1; 2010 1st sp.s. c 23 s 1102; 1997 c 238 s 2; 1994 sp.s. c 2 s 1.]
Notes:
Tax preference performance statement exemption—Automatic expiration date exemption—2022 c 295 s 1: "Section 1 of this act is exempt from RCW 82.32.805 and 82.32.808." [ 2022 c 295 s 4.]
Application—2022 c 295: "This act applies to reporting periods beginning on or after January 1, 2023." [ 2022 c 295 s 3.]
Effective date—2010 1st sp.s. c 23: See note following RCW 82.32.655.
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Findings—Intent—1997 c 238: "The legislature finds that many businesses have difficulty applying the small business credit under RCW 82.04.4451. Further, the legislature appreciates the valuable time and resources small businesses expend on calculating the amount of credit based upon a statutory formula. For the purpose of tax simplification, it is the intent of this act to direct the department of revenue to create a schedule, in standard increments, to replace required calculations for the small business credit. Each taxpayer can make reference to the taxpayer's tax range on the schedule and find the amount of the taxpayer's small business credit. Further, no taxpayer will owe a greater amount of tax nor will any taxpayer be responsible for a greater amount of taxes otherwise due." [ 1997 c 238 s 1.]
Effective date—1994 sp.s. c 2: "This act shall take effect on July 1, 1994." [ 1994 sp.s. c 2 s 5.]
Application to reporting periods—1994 sp.s. c 2 s 1: "Section 1 of this act applies to the entire period of reporting periods ending after July 1, 1994." [ 1994 sp.s. c 2 s 6.]
PDF
RCW 82.04.4451
Credit against tax due—Maximum credit—Table. (Effective January 1, 2029.)
(1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due under this chapter, as provided in this section. Except for taxpayers that report at least 50 percent of their taxable amount under RCW 82.04.255, 82.04.290(2)(a), 82.04.285, and 82.04.405, the maximum credit for a taxpayer for a reporting period is $125 multiplied by the number of months in the reporting period, as determined under RCW 82.32.045. For a taxpayer that reports at least 50 percent of its taxable amount under RCW 82.04.255, 82.04.290(2)(a), 82.04.285, and 82.04.405, the maximum credit for a reporting period is $375 multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.
(2) When the amount of tax otherwise due under this chapter is equal to or less than the maximum credit, a credit is allowed equal to the amount of tax otherwise due under this chapter.
(3) When the amount of tax otherwise due under this chapter exceeds the maximum credit, a reduced credit is allowed equal to twice the maximum credit, minus the tax otherwise due under this chapter, but not less than zero.
(4) The department may prepare a tax credit table consisting of tax ranges using increments of no more than five dollars and a corresponding tax credit to be applied to those tax ranges. The table shall be prepared in such a manner that no taxpayer will owe a greater amount of tax by using the table than would be owed by performing the calculation under subsections (1) through (3) of this section. A table prepared by the department under this subsection must be used by all taxpayers in taking the credit provided in this section.
[ 2026 c 250 s 7; 2026 c 238 s 909; 2022 c 295 s 1; 2010 1st sp.s. c 23 s 1102; 1997 c 238 s 2; 1994 sp.s. c 2 s 1.]
Notes:
Reviser's note: This section was amended by 2026 c 238 s 909 and by 2026 c 250 s 7, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025(2). For rule of construction, see RCW 1.12.025(1).
Effective date—2026 c 238 ss 909-911: "Sections 909 through 911 of this act take effect January 1, 2029." [ 2026 c 238 s 912.]
Findings—Intent—Effect of invalidation of 2026 c 238 s 201—Automatic expiration date and tax preference performance statement exemption—Necessity of act—Intent—Implementation by department of revenue—2026 c 238: See notes following RCW 82A.04.030.
Tax preference performance statement exemption—Automatic expiration date exemption—2022 c 295 s 1: "Section 1 of this act is exempt from RCW 82.32.805 and 82.32.808." [ 2022 c 295 s 4.]
Application—2022 c 295: "This act applies to reporting periods beginning on or after January 1, 2023." [ 2022 c 295 s 3.]
Effective date—2010 1st sp.s. c 23: See note following RCW 82.32.655.
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Findings—Intent—1997 c 238: "The legislature finds that many businesses have difficulty applying the small business credit under RCW 82.04.4451. Further, the legislature appreciates the valuable time and resources small businesses expend on calculating the amount of credit based upon a statutory formula. For the purpose of tax simplification, it is the intent of this act to direct the department of revenue to create a schedule, in standard increments, to replace required calculations for the small business credit. Each taxpayer can make reference to the taxpayer's tax range on the schedule and find the amount of the taxpayer's small business credit. Further, no taxpayer will owe a greater amount of tax nor will any taxpayer be responsible for a greater amount of taxes otherwise due." [ 1997 c 238 s 1.]
Effective date—1994 sp.s. c 2: "This act shall take effect on July 1, 1994." [ 1994 sp.s. c 2 s 5.]
Application to reporting periods—1994 sp.s. c 2 s 1: "Section 1 of this act applies to the entire period of reporting periods ending after July 1, 1994." [ 1994 sp.s. c 2 s 6.]

catchline: Credit against tax due—Maximum credit—Table. (Effective until January 1, 2029.)


title: RCW 82.04.4461

text:
(1)(a)(i) In computing the tax imposed under this chapter, a credit is allowed for each person for qualified aerospace product development. For a person who is a manufacturer or processor for hire of commercial airplanes or components of such airplanes, credit may be earned for expenditures occurring after December 1, 2003. For all other persons, credit may be earned only for expenditures occurring after June 30, 2008.
(ii) For purposes of this subsection, "commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
(b) Before July 1, 2005, any credits earned under this section must be accrued and carried forward and may not be used until July 1, 2005. These carryover credits may be used at any time thereafter, and may be carried over until used. Refunds may not be granted in the place of a credit.
(2) The credit is equal to the amount of qualified aerospace product development expenditures of a person, multiplied by the rate of 1.5 percent.
(3) Except as provided in subsection (1)(b) of this section the credit must be claimed against taxes due for the same calendar year in which the qualified aerospace product development expenditures are incurred. Credit earned on or after July 1, 2005, may not be carried over. The credit for each calendar year may not exceed the amount of tax otherwise due under this chapter for the calendar year. Refunds may not be granted in the place of a credit.
(4) Any person claiming the credit must file a form prescribed by the department that must include the amount of the credit claimed, an estimate of the anticipated aerospace product development expenditures during the calendar year for which the credit is claimed, an estimate of the taxable amount during the calendar year for which the credit is claimed, and such additional information as the department may prescribe.
(5) The definitions in this subsection apply throughout this section.
(a) "Aerospace product" has the meaning given in RCW 82.08.975.
(b) "Aerospace product development" means research, design, and engineering activities performed in relation to the development of an aerospace product or of a product line, model, or model derivative of an aerospace product, including prototype development, testing, and certification. The term includes the discovery of technological information, the translating of technological information into new or improved products, processes, techniques, formulas, or inventions, and the adaptation of existing products and models into new products or new models, or derivatives of products or models. The term does not include manufacturing activities or other production-oriented activities, however the term does include tool design and engineering design for the manufacturing process. The term does not include surveys and studies, social science and humanities research, market research or testing, quality control, sale promotion and service, computer software developed for internal use, and research in areas such as improved style, taste, and seasonal design.
(c) "Qualified aerospace product development" means aerospace product development performed within this state.
(d) "Qualified aerospace product development expenditures" means operating expenses, including wages, compensation of a proprietor or a partner in a partnership as determined by the department, benefits, supplies, and computer expenses, directly incurred in qualified aerospace product development by a person claiming the credit provided in this section. The term does not include amounts paid to a person or to the state and any of its departments and institutions, other than a public educational or research institution to conduct qualified aerospace product development. The term does not include capital costs and overhead, such as expenses for land, structures, or depreciable property.
(e) "Taxable amount" means the taxable amount subject to the tax imposed in this chapter required to be reported on the person's tax returns during the year in which the credit is claimed, less any taxable amount for which a credit is allowed under RCW 82.04.440.
(6) In addition to all other requirements under this title, a person claiming the credit under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(7) Credit may not be claimed for expenditures for which a credit is claimed under *RCW 82.04.4452.
(8) This section expires July 1, 2040.
[ 2017 c 135 s 15; 2013 3rd sp.s. c 2 s 9; 2010 c 114 s 115; 2008 c 81 s 7; 2007 c 54 s 11; 2003 2nd sp.s. c 1 s 7.]
Notes:
*Reviser's note: RCW 82.04.4452 expired January 1, 2015.
Effective date—2017 c 135: See note following RCW 82.32.534.
Contingent effective date—2013 3rd sp.s. c 2: See RCW 82.32.850.
Findings—Intent—2013 3rd sp.s. c 2: See note following RCW 82.32.850.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Findings—Savings—Effective date—2008 c 81: See notes following RCW 82.08.975.
Severability—2007 c 54: See note following RCW 82.04.050.
Finding—2003 2nd sp.s. c 1: "The legislature finds that the people of the state have benefited from the presence of the aerospace industry in Washington state. The aerospace industry provides good wages and benefits for the thousands of engineers, mechanics, and support staff working directly in the industry throughout the state. The suppliers and vendors that support the aerospace industry in turn provide a range of jobs. The legislature declares that it is in the public interest to encourage the continued presence of this industry through the provision of tax incentives. The comprehensive tax incentives in this act address the cost of doing business in Washington state compared to locations in other states." [ 2003 2nd sp.s. c 1 s 1.]

catchline: Credit—Preproduction development expenditures. (Expires July 1, 2040.)


title: RCW 82.04.4463

text:
(1) In computing the tax imposed under this chapter, a credit is allowed for property taxes and leasehold excise taxes paid during the calendar year.
(2) The credit is equal to:
(a)(i)(A) Property taxes paid on buildings, and land upon which the buildings are located, constructed after December 1, 2003, and used exclusively in manufacturing commercial airplanes or components of such airplanes; and
(B) Leasehold excise taxes paid with respect to buildings constructed after January 1, 2006, the land upon which the buildings are located, or both, if the buildings are used exclusively in manufacturing commercial airplanes or components of such airplanes; and
(C) Property taxes or leasehold excise taxes paid on, or with respect to, buildings constructed after June 30, 2008, the land upon which the buildings are located, or both, and used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, by persons not within the scope of (a)(i)(A) and (B) of this subsection (2) and are taxable under RCW 82.04.290(3), 82.04.260(11)(b), or 82.04.250(3); or
(ii) Property taxes attributable to an increase in assessed value due to the renovation or expansion, after: (A) December 1, 2003, of a building used exclusively in manufacturing commercial airplanes or components of such airplanes; and (B) June 30, 2008, of buildings used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, by persons not within the scope of (a)(ii)(A) of this subsection (2) and are taxable under RCW 82.04.290(3), 82.04.260(11)(b), or 82.04.250(3); and
(b) An amount equal to:
(i)(A) Property taxes paid, by persons taxable under RCW 82.04.260(11)(a), on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after December 1, 2003;
(B) Property taxes paid, by persons taxable under RCW 82.04.260(11)(b), on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after June 30, 2008; or
(C) Property taxes paid, by persons taxable under RCW 82.04.250(3) or 82.04.290(3), on computer hardware, computer peripherals, and software exempt under RCW 82.08.975 or 82.12.975 and acquired after June 30, 2008.
(ii) For purposes of determining the amount eligible for credit under (i)(A) and (B) of this subsection (2)(b), the amount of property taxes paid is multiplied by a fraction.
(A) The numerator of the fraction is the total taxable amount subject to the tax imposed under RCW 82.04.260(11) (a) or (b) on the applicable business activities of manufacturing commercial airplanes, components of such airplanes, or tooling specifically designed for use in the manufacturing of commercial airplanes or components of such airplanes.
(B) The denominator of the fraction is the total taxable amount subject to the tax imposed under all manufacturing classifications in chapter 82.04 RCW.
(C) For purposes of both the numerator and denominator of the fraction, the total taxable amount refers to the total taxable amount required to be reported on the person's returns for the calendar year before the calendar year in which the credit under this section is earned. The department may provide for an alternative method for calculating the numerator in cases where the tax rate provided in RCW 82.04.260(11) for manufacturing was not in effect during the full calendar year before the calendar year in which the credit under this section is earned.
(D) No credit is available under (b)(i)(A) or (B) of this subsection (2) if either the numerator or the denominator of the fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one.
(E) As used in (b)(ii)(C) of this subsection (2), "returns" means the tax returns for which the tax imposed under this chapter is reported to the department.
(3) The definitions in this subsection apply throughout this section, unless the context clearly indicates otherwise.
(a) "Aerospace product development" has the same meaning as provided in RCW 82.04.4461.
(b) "Aerospace services" has the same meaning given in RCW 82.08.975.
(c) "Commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
(4) A credit earned during one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year, but may not be carried over a second year. No refunds may be granted for credits under this section.
(5) In addition to all other requirements under this title, a person claiming the credit under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(6) This section expires July 1, 2040.
[ 2017 c 135 s 16; 2013 3rd sp.s. c 2 s 10; 2010 1st sp.s. c 23 s 515; (2010 1st sp.s. c 23 s 514 expired June 10, 2010); 2010 c 114 s 116; 2008 c 81 s 8; 2006 c 177 s 10; 2005 c 514 s 501; 2003 2nd sp.s. c 1 s 15.]
Notes:
Effective date—2017 c 135: See note following RCW 82.32.534.
Contingent effective date—2013 3rd sp.s. c 2: See RCW 82.32.850.
Findings—Intent—2013 3rd sp.s. c 2: See note following RCW 82.32.850.
Expiration date—2010 1st sp.s. c 23 ss 503, 505, and 514: See note following RCW 82.04.4266.
Effective date—2010 1st sp.s. c 23 ss 504, 506, and 515: See note following RCW 82.04.4266.
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Effective date—2010 1st sp.s. c 23: See note following RCW 82.04.4292.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Findings—Savings—Effective date—2008 c 81: See notes following RCW 82.08.975.
Effective date—2006 c 177 ss 10 and 11: "Sections 10 and 11 of this act take effect January 1, 2007." [ 2006 c 177 s 13.]
Application—2006 c 177 s 10: "Section 10 of this act applies with respect to leasehold excise taxes paid on or after January 1, 2007." [ 2006 c 177 s 11.]
Effective date—2005 c 514 ss 501 and 1002: "Sections 501 and 1002 of this act take effect January 1, 2006." [ 2005 c 514 s 1305.]
Part headings not law—Severability—2005 c 514: See notes following RCW 82.12.808.
Finding—2003 2nd sp.s. c 1: See note following RCW 82.04.4461.

catchline: Credit—Property and leasehold taxes paid on property used for manufacture of commercial airplanes. (Expires July 1, 2040.)


title: RCW 82.04.447

text:
(1) Unless the context clearly requires otherwise, the definitions in this subsection apply throughout this section.
(a) "Direct service industrial customer" means a person who is an industrial customer that contracts for the purchase of power from the Bonneville Power Administration for direct consumption as of May 8, 2001. "Direct service industrial customer" includes a person who is a subsidiary that is more than fifty percent owned by a direct service industrial customer and who receives power from the Bonneville Power Administration pursuant to the parent's contract for power.
(b) "Facility" means a gas turbine electrical generation facility that does not exist on May 8, 2001, and is owned by a direct service industrial customer for the purpose of producing electricity to be consumed by the direct service industrial customer.
(c) "Average annual employment" means the total employment in this state for a calendar year at the direct service industrial customer's location where electricity from the facility will be consumed.
(2) Effective July 1, 2001, a credit is allowed against the tax due under this chapter to a direct service industrial customer who purchases natural or manufactured gas from a gas distribution business subject to the public utility tax under chapter 82.16 RCW. The credit is equal to the value of natural or manufactured gas purchased from a gas distribution business and used to generate electricity at the facility multiplied by the rate in effect for the public utility tax on gas distribution businesses under RCW 82.16.020. This credit may be used each reporting period for sixty months following the first month natural or manufactured gas was purchased from a gas distribution business by a direct service industrial customer who constructs a facility.
(3) Application for credit shall be made by the direct service industrial consumer before the first purchase of natural or manufactured gas. The application shall be in a form and manner prescribed by the department and shall include but is not limited to information regarding the location of the facility, the projected date of first purchase of natural or manufactured gas to generate electricity at the facility, the date construction is projected to begin or did begin, the applicant's average annual employment in the state for the six calendar years immediately preceding the year in which the application is made, and affirm the applicant's status as a direct service industrial customer. The department shall rule on the application within thirty days of receipt.
(4) Credit under this section is limited to the amount of tax imposed under this chapter. Refunds shall not be given in place of credits and credits may not be carried over to subsequent calendar years.
(5) All or part of the credit shall be disallowed and must be paid if the average of the direct service industrial customer's average annual employment for the five calendar years subsequent to the calendar year containing the first month of purchase of natural or manufactured gas to generate electricity at a facility is less than the six-year average annual employment stated on the application for credit under this section. The direct service industrial customer will certify to the department by June 1st of the sixth calendar year following the calendar year in which the month of first purchase of gas occurs the average annual employment for each of the five prior calendar years. All or part of the credit that shall be disallowed and must be paid is commensurate with the decrease in the five-year average of average annual employment as follows:
Decrease in Average Annual
Employment Over
Five-Year Period
% of Credit to be Paid
Less than 10%
10%
10% or more but less than 25%
25%
25% or more but less than 50%
50%
50% or more but less than 75%
75%
75% or more
100%
(6)(a) The direct service industrial customer shall begin paying the credit that is disallowed and is to be paid in the sixth calendar year following the calendar year in which the month following the month of first purchase of natural or manufactured gas to generate electricity at the facility occurs. The first payment will be due on or before December 31st with subsequent annual payments due on or before December 31st of the following four years according to the following schedule:
Payment Year
% of Credit to be Paid
1
10%
2
15%
3
20%
4
25%
5
30%
(b) The department may authorize an accelerated payment schedule upon request of the taxpayer.
(c) Interest shall not be charged on the credit that is disallowed for the sixty-month period the credit may be taken, although all other penalties and interest applicable to delinquent excise taxes may be assessed and imposed. The debt for credit that is disallowed and must be paid will not be extinguished by insolvency or other failure of the direct service industrial customer. Transfer of ownership of the facility does not affect eligibility for this credit. However, the credit is available to the successor only if the eligibility conditions of this section are met.
(7) The employment security department shall make, and certify to the department of revenue, all determinations of employment under this section as requested by the department.
(8) A person claiming this credit shall supply to the department quarterly reports containing information necessary to document the total volume of natural or manufactured gas purchased in the quarter, the value of that total volume, and the percentage of the total volume used to generate electricity at the facility.
[ 2001 c 214 s 9.]
Notes:
Severability—Effective date—2001 c 214: See notes following RCW 80.50.010.
Findings—2001 c 214: See note following RCW 39.35.010.

catchline: Credit—Natural or manufactured gas purchased by direct service industrial customers—Reports.


title: RCW 82.04.448

text:
(1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under RCW 82.04.241 for persons engaged in the business of manufacturing semiconductor materials. For the purposes of this section "semiconductor materials" has the same meaning as provided in RCW 82.04.241.
(2)(a) The credit under this section equals $3,000 for each employment position used in manufacturing production that takes place in a new building exempt from sales and use tax under RCW 82.08.965 and 82.12.965. A credit is earned for the calendar year a person fills a position. Additionally a credit is earned for each year the position is maintained over the subsequent consecutive years, up to eight years. Those positions that are not filled for the entire year are eligible for 50 percent of the credit if filled less than six months, and the entire credit if filled more than six months.
(b) To qualify for the credit, the manufacturing activity of the person must be conducted at a new building that qualifies for the exemption from sales and use tax under RCW 82.08.965 and 82.12.965.
(c) In those situations where a production building in existence on the effective date of this section will be phased out of operation, during which time employment at the new building at the same site is increased, the person is eligible for credit for employment at the existing building and new building, with the limitation that the combined eligible employment not exceed full employment at the new building. "Full employment" has the same meaning as in RCW 82.08.965. The credit may not be earned until the commencement of commercial production, as that term is used in RCW 82.08.965.
(3) No application is necessary for the tax credit. The person is subject to all of the requirements of chapter 82.32 RCW. In no case may a credit earned during one calendar year be carried over to be credited against taxes incurred in a subsequent calendar year. No refunds may be granted for credits under this section.
(4) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been claimed is immediately due. The department must assess interest, but not penalties, on the taxes for which the person is not eligible. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, is retroactive to the date the tax credit was taken, and accrues until the taxes for which a credit has been used are repaid.
(5) A person claiming the credit under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(6) Credits may be claimed after the expiration date of this section, for those buildings at which commercial production began before the expiration date of this section, subject to all of the eligibility criteria and limitations of this section.
(7) Any person who has claimed the credit under this section must reimburse the department for 50 percent of the amount of the tax preference under this section if the number of persons employed by the person claiming the tax preference is less than 90 percent of the person's three-year employment average for the three years immediately preceding the year in which the credit is claimed.
(8) Pursuant to RCW 82.32.790, this section is contingent on the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington.
(9) This section expires January 1, 2034, unless the contingency in RCW 82.32.790(2) occurs.
[ 2024 c 261 s 4. Prior: 2017 3rd sp.s. c 37 s 516; (2017 3rd sp.s. c 37 s 515 expired January 1, 2018); 2017 c 135 s 17; 2010 c 114 s 117; 2003 c 149 s 9.]
Notes:
Tax preference performance statement exemption—Effective date—2024 c 261 ss 2-9: See notes following RCW 82.04.241.
Effective date—2017 3rd sp.s. c 37 ss 101-104, 403, 503, 506, 508, 510, 512, 514, 516, 518, 520, 522, 524, 526, 703, 705, 707, and 801-803: See note following RCW 82.04.2404.
Expiration date—2017 3rd sp.s. c 37 ss 502, 505, 507, 509, 511, 513, 515, 517, 519, 521, 523, and 525: See note following RCW 82.04.2404.
*Contingent effective date—2017 c 135; 2010 c 114: See RCW 82.32.790.
Effective date—2017 c 135: See note following RCW 82.32.534.
Finding—Intent—2010 c 114: See note following RCW 82.32.534.
Findings—Intent—2003 c 149: See note following RCW 82.04.426.

catchline: Credit—Manufacturing semiconductor materials. (Contingent effective date; contingent expiration date.)


title: RCW 82.04.4481

text:
(1) In computing the tax imposed under this chapter, a credit is allowed for all property taxes paid during the calendar year on property owned by a direct service industrial customer and reasonably necessary for the purposes of an aluminum smelter.
(2) A person claiming the credit under this section is subject to all the requirements of chapter 82.32 RCW. A credit earned during one calendar year may be carried over to be credited against taxes incurred in the subsequent calendar year, but may not be carried over a second year. Credits carried over must be applied to tax liability before new credits. No refunds may be granted for credits under this section.
(3) Credits may not be claimed under this section for property taxes levied for collection in 2027 and thereafter.
(4) A person claiming the credit provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
[ 2017 c 135 s 18; 2015 3rd sp.s. c 6 s 503; 2011 c 174 s 302. Prior: 2010 1st sp.s. c 2 s 2; 2010 c 114 s 118; 2006 c 182 s 2; 2004 c 24 s 8.]
Notes:
Effective date—2017 c 135: See note following RCW 82.32.534.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.
Findings—Tax preference performance statement—2015 3rd sp.s. c 6 ss 502-506: See note following RCW 82.04.2909.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Intent—Effective date—2004 c 24: See notes following RCW 82.04.2909.

catchline: Credit—Property taxes paid by aluminum smelter.


title: RCW 82.04.4482

text:
(1) A person who is subject to tax under this chapter on gross income from sales of electricity, natural gas, or manufactured gas made to an aluminum smelter is eligible for an exemption from the tax in the form of a credit, if the contract for sale of electricity or gas to the aluminum smelter specifies that the price charged for the electricity or gas will be reduced by an amount equal to the credit.
(2) The credit is equal to the gross income from the sale of the electricity or gas to an aluminum smelter multiplied by the corresponding rate in effect at the time of the sale under this chapter.
(3) The exemption provided for in this section does not apply to amounts received from the remarketing or resale of electricity originally obtained by contract for the smelting process.
[ 2004 c 24 s 9.]
Notes:
Intent—Effective date—2004 c 24: See notes following RCW 82.04.2909.

catchline: Credit—Sales of electricity or gas to an aluminum smelter.


title: RCW 82.04.4486

text:
(1) In computing the tax imposed under this chapter, a credit is allowed to a buyer of syrup to be used by the buyer in making carbonated beverages that are sold by the buyer if the tax imposed by RCW 82.64.020 has been paid in respect to the syrup. The amount of the credit shall be equal to twenty-five percent from July 1, 2006, through June 30, 2007, fifty percent from July 1, 2007, through June 30, 2008, seventy-five percent from July 1, 2008, through June 30, 2009, and one hundred percent after June 30, 2009, of the taxes imposed under RCW 82.64.020 in respect to the syrup purchased by the buyer.
(2) Credit under this section shall be earned, and claimed against taxes due under this chapter, for the tax reporting period in which the syrup was purchased by the person claiming credit under this section. The credit shall not exceed the tax otherwise due under this chapter for the tax reporting period. Unused credit may be carried over and used in subsequent tax reporting periods, except that no credit may be claimed more than twelve months from the end of the tax reporting period in which the credit was earned. No refunds shall be granted for credits under this section.
(3) No credit is available under this section for taxes paid under RCW 82.64.020 before July 1, 2006.
(4) For the purposes of this section, "carbonated beverage," "previously taxed syrup," and "syrup" have the same meanings as provided in RCW 82.64.010.
[ 2006 c 245 s 1.]
Notes:
Effective date—2006 c 245: "This act takes effect July 1, 2006." [ 2006 c 245 s 2.]

catchline: Credit—Syrup taxes paid by buyer.


title: RCW 82.04.4489

text:
(1) Subject to the limitations in this section, a credit is allowed against the tax imposed under this chapter for contributions made by a person to a Washington motion picture competitiveness program.
(2) The person must make the contribution before claiming a credit authorized under this section. Credits earned under this section may be claimed against taxes due for the calendar year in which the contribution is made. The amount of credit claimed for a reporting period may not exceed the tax otherwise due under this chapter for that reporting period. No person may claim more than $1,000,000 of credit in any calendar year, including credit carried over from a previous calendar year. No refunds may be granted for any unused credits.
(3) The maximum credit that may be earned for each calendar year under this section for a person is limited to the lesser of $1,000,000 or an amount equal to 100 percent of the contributions made by the person to a program during the calendar year.
(4) Except as provided under subsection (5) of this section, a tax credit claimed under this section may not be carried over to another year.
(5) Any amount of tax credit otherwise allowable under this section not claimed by the person in any calendar year may be carried over and claimed against the person's tax liability for the next succeeding calendar year. Any credit remaining unused in the next succeeding calendar year may be carried forward and claimed against the person's tax liability for the second succeeding calendar year; and any credit not used in that second succeeding calendar year may be carried over and claimed against the person's tax liability for the third succeeding calendar year, but may not be carried over for any calendar year thereafter.
(6) Credits are available on a first-in-time basis. The department must disallow any credits, or portion thereof, that would cause the total amount of credits claimed under this section during any calendar year to exceed $15,000,000. If this limitation is reached, the department must notify all Washington motion picture competitiveness programs that the annual statewide limit has been met. In addition, the department must provide written notice to any person who has claimed tax credits in excess of the limitation in this subsection. The notice must indicate the amount of tax due and provide that the tax be paid within 30 days from the date of the notice. The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.
(7) To claim a credit under this section, a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.
(8) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section.
(9) A Washington motion picture competitiveness program must provide to the department, upon request, such information needed to verify eligibility for credit under this section, including information regarding contributions received by the program.
(10) The department may not allow any credit under this section before July 1, 2006.
(11) For the purposes of this section, "Washington motion picture competitiveness program" or "program" means an organization established pursuant to chapter 43.365 RCW.
(12) Persons claiming a credit against the tax imposed under this chapter for contributions made to a Washington motion picture competitiveness program are exempt from the annual reporting requirements in RCW 82.32.534 and 43.365.040.
(13) No credit may be earned for contributions made on or after July 1, 2030.
[ 2023 c 374 s 9; 2022 c 270 s 5; 2017 3rd sp.s. c 37 s 1102; 2012 c 189 s 4; 2008 c 85 s 3; 2006 c 247 s 5.]

catchline: Credit—Motion picture competitiveness program.


title: RCW 82.04.449

text:
(1) In computing the tax imposed under this chapter, a credit is allowed for participants in the Washington customized employment training program created in RCW 28B.67.020. The credit allowed under this section is equal to 50 percent of the value of a participant's payments to the employment training finance account created in RCW 28B.67.030. If a participant in the program does not meet the requirements of RCW 28B.67.020(2)(b)(ii), the participant must remit to the department the value of any credits taken plus interest. The credit earned by a participant in one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year. No credit may be allowed for repayment of training allowances received from the Washington customized employment training program on or after July 1, 2031.
(2) A person claiming the credit provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(3) By December 31, 2028, the college board, as defined in RCW 28B.50.030, shall submit to the higher education committees of the legislature a report on:
(a) The distribution of credit eligibility by county, as indicated by participants in the Washington customized employment training program created in RCW 28B.67.020;
(b) The distribution of qualified training institutions that provided trainings under the Washington customized employment training program, by county; and
(c) Efforts taken by the college board to encourage use of the credit by a greater variety of industries and participation of a greater variety of qualified training institutions, as defined in RCW 28B.67.010.
(4) This section expires July 1, 2033.
[ 2025 c 289 s 2; 2021 c 116 s 3; 2017 c 135 s 20; 2012 c 46 s 3; 2010 c 114 s 121; 2009 c 296 s 3; 2006 c 112 s 5.]
Notes:
Tax preference performance statement—2025 c 289 s 2: "(1) This section is the tax preference performance statement for the tax preference contained in section 2, chapter 289, Laws of 2025. This performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to accomplish a general purpose, as indicated in RCW 82.32.808(2)(f), which is to provide customized workforce development and skill development training that enhances worker skill sets.
(3) It is the legislature's specific public policy objective to provide customized training assistance that retains and expands existing businesses in Washington.
(4) If a review finds that 75 percent of participating businesses complete the training and repay the customized employment training program loan, then the legislature intends to extend the expiration date of this tax preference.
(5) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to any data collected by the state." [ 2025 c 289 s 3.]
Findings—Intent—2025 c 289: "The legislature finds that affordable employer-specific worker training not only helps businesses but also improves the quality of life for workers and communities. The legislature also finds that 75 percent of participating businesses completed customized training under the program created in RCW 28B.67.020 and repaid the customized employment training program training allowance, a performance threshold identified by the 67th legislature as satisfactory to extend the expiration date of the tax credit established in RCW 82.04.449. It is the intent of the legislature to aid in attracting and retaining jobs in Washington by extending the expiration of the customized employment training program tax credit to July 1, 2031." [ 2025 c 289 s 1.]
Finding—2021 c 116: "The legislature finds that due to the COVID-19 pandemic, there is new urgency for employer-affordable programs supporting worker training. It is the objective of the legislature to aid in the recruiting, retaining, and expanding of existing small businesses in Washington by extending the expiration of the customized employment training program tax credit to July 1, 2026." [ 2021 c 116 s 1.]
Tax preference performance statement—2021 c 116: "(1) This section is the tax preference performance statement for the tax preference contained in section 3, chapter 116, Laws of 2021. This performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or to be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to accomplish a general purpose, to provide customized workforce development and skill development training that enhance worker skill sets.
(3) It is the legislature's specific public policy objective to provide customized training assistance that retains and expands existing businesses in Washington.
(4) If a review finds that 75 percent of participating businesses complete the training and repay the customized employment training program loan, then the legislature intends to extend the expiration date of this tax preference.
(5) In order to obtain the data necessary to perform the review in subsection (4) of this section, the joint legislative audit and review committee may refer to any data collected by the state." [ 2021 c 116 s 2.]
Effective date—2021 c 116: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2021." [ 2021 c 116 s 4.]
Effective date—2017 c 135: See note following RCW 82.32.534.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.

catchline: Credit—Washington customized employment training program—Report to the legislature. (Expires July 1, 2033.)


title: RCW 82.04.4496

text:
(1)(a)(i) A person who is taxable under this chapter is allowed a credit against the tax imposed in this chapter according to the gross vehicle weight rating of the vehicle and the incremental cost of the vehicle purchased above the purchase price of a comparable conventionally fueled vehicle. The credit is limited, as set forth in the table below, to the lesser of the incremental cost amount or the maximum credit amount per vehicle purchased, and subject to a maximum annual credit amount per vehicle class.
Gross Vehicle Weight
Incremental Cost Amount
Maximum Credit Amount
Per Vehicle
Maximum Annual Credit
Per Vehicle Class
Up to 14,000 pounds
75% of incremental cost
$25,000
$2,000,000
14,001 to 26,500 pounds
75% of incremental cost
$50,000
$2,000,000
Above 26,500 pounds
75% of incremental cost
$100,000
$2,000,000
(ii) A person who is taxable under this chapter is allowed a credit against the tax imposed in this chapter for up to 50 percent of the cost to purchase alternative fuel vehicle infrastructure, tangible personal property that will become a component of alternative fuel vehicle infrastructure, and installation and construction of alternative fuel vehicle infrastructure, but excluding the cost of property acquisition and site improvement related to the installation of alternative fuel vehicle infrastructure. The credit is subject to a maximum annual credit amount of $2,000,000.
(b) On September 1st of each year, any unused credits from any category identified in (a) of this subsection must be made available to applicants applying for credits under any other category identified in (a) of this subsection, subject to the maximum annual and total credit amounts identified in this subsection. The credit established in this section and RCW 82.16.0496 is subject to a maximum annual credit amount of $6,000,000, and a maximum total credit amount of $32,500,000 since the credit became available on July 15, 2015.
(c) The credit provided in (a)(i) of this subsection is available for the lease of a vehicle. The credit amount for a leased vehicle is equal to the credit in (a)(i) of this subsection multiplied by the lease reduction factor. The person claiming the credit for a leased vehicle must be the lessee as identified in the lease contract.
(2) A person who is taxable under this chapter is allowed, subject to the maximum annual credit per category in subsection (1)(a) of this section, a credit against the tax imposed in this chapter for the lesser of $25,000 or 50 percent of the costs of converting a commercial vehicle to be principally powered by a clean alternative fuel with a United States environmental protection agency certified conversion.
(3) The total credits under subsection (1)(a)(i) of this section may not exceed the lesser of $250,000 or 25 vehicles per person per calendar year.
(4) A person may not receive credit under this section for amounts claimed as credits under chapter 82.16 RCW.
(5) Credits are available on a first-in-time basis.
(a) The department must disallow any credits, or portion thereof, that would cause the total amount of credits claimed under this section, and RCW 82.16.0496, during any calendar year to exceed $6,000,000. The department must provide notification on its website monthly on the amount of credits that have been applied for, the amount issued, and the amount remaining before the statewide annual limit is reached. In addition, the department must provide written notice to any person who has applied to claim tax credits in excess of the limitation in this subsection.
(b) The department must disallow any credits, or portion thereof, that would cause the total amount of credits claimed beginning July 15, 2015, under this section and RCW 82.16.0496 to exceed $32,500,000. The department must provide notification on its website monthly on the total amount of credits that have been applied for, the amount issued, and the amount remaining before the statewide limit is reached. In addition, the department must provide written notice to any person who has applied to claim tax credits in excess of the limitation in this subsection.
(6) For the purposes of the limits provided in this section, a credit must be counted against such limits for the calendar year in which the credit is earned.
(7) To claim a credit under this section a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. No refunds may be granted for credits under this section.
(8) To claim a credit under this section, the person applying must:
(a) Complete an application for the credit which must include:
(i) The name, business address, and tax identification number of the applicant;
(ii) A quote or unexecuted copy of the purchase requisition or order for the vehicle, infrastructure, infrastructure components, infrastructure construction, or infrastructure installation;
(iii) The type of alternative fuel to be used by the vehicle or supported by the infrastructure;
(iv) The incremental cost of the alternative fuel system for vehicle credits;
(v) The anticipated delivery date of the vehicle, the anticipated delivery date of the infrastructure or infrastructure components, the anticipated construction completion date of the infrastructure, or the anticipated installation completion date of the infrastructure;
(vi) The estimated annual fuel use of the vehicle in the anticipated duties or the estimated annual fuel to be supplied by the infrastructure;
(vii) The gross weight of each vehicle for vehicle credits;
(viii) For leased vehicles, a copy of the lease contract that includes the gross capitalized cost, residual value, and name of the lessee; and
(ix) Any other information deemed necessary by the department to support administration or reporting of the program.
(b) Within 15 days of notice of credit availability from the department, provide notice of intent to claim the credit including:
(i) A copy of the order for the vehicle or infrastructure-related item, including the total cost for the vehicle or infrastructure-related item;
(ii) The anticipated delivery date of the vehicle or infrastructure or infrastructure component, which must be within one year of acceptance of the credit;
(iii) The anticipated construction or installation completion date of the infrastructure, which must be within two years of acceptance of the credit; and
(iv) Any other information deemed necessary by the department to support administration or reporting of the program.
(c) Provide final documentation within 30 days of receipt of the vehicle or infrastructure or infrastructure components or of completion of construction or installation of the infrastructure, including:
(i) A copy of the final invoice for the vehicle or infrastructure-related items;
(ii) A copy of the factory build sheet or equivalent documentation;
(iii) The vehicle identification number of each vehicle;
(iv) The incremental cost of the alternative fuel system for vehicle credits;
(v) Attestations signed by both the seller and purchaser of each vehicle attesting that the incremental cost of the alternative fuel system includes only the costs necessary for the vehicle to run on alternative fuel and no other vehicle options, equipment, or costs; and
(vi) Any other information deemed necessary by the department to support administration or reporting of the program.
(9) A person applying for credit under subsection (8) of this section may apply for multiple vehicles on the same application, but the application must include the required information for each vehicle included in the application. A separate application is required for infrastructure-related items, but all infrastructure-related items at a single location may be included in a single application provided the required information for each infrastructure-related item is included in the application.
(10) To administer the credits, the department must, at a minimum:
(a) Provide notification on its website monthly of the amount of credits that have been applied for, claimed, and the amount remaining before the statewide annual limit and total limit are reached;
(b) Within 15 days of receipt of the application, notify persons applying of the availability of tax credits in the year in which the vehicles or infrastructure applied for are anticipated to be delivered, constructed, or installed;
(c) Within 15 days of receipt of the notice of intent to claim the tax credit, notify the applicant of the approval, denial, or missing information in their notice; and
(d) Within 15 days of receipt of final documentation, review the documentation and notify the person applying of the acceptance of their final documentation.
(11) If a person fails to supply the information as required in subsection (8) of this section, the department must deny the application.
(12)(a) Taxpayers are only eligible for a credit under this section based on:
(i) Sales or leases of new commercial vehicles and qualifying used commercial vehicles with propulsion units that are principally powered by a clean alternative fuel;
(ii) Costs to modify a commercial vehicle, including sales of tangible personal property incorporated into the vehicle and labor or service expenses incurred in modifying the vehicle, to be principally powered by a clean alternative fuel; or
(iii) Sales of alternative fuel vehicle infrastructure or infrastructure components, or the cost of construction or installation of alternative fuel vehicle infrastructure.
(b) A credit is earned when the purchaser or the lessee takes receipt of the qualifying commercial vehicle or infrastructure-related item, the vehicle conversion is complete, or the construction or installation of the infrastructure is complete.
(13) A credit earned during one calendar year may be carried over to be credited against taxes incurred in the subsequent calendar year, but may not be carried over a second year.
(14) The department must conduct outreach to interested parties to obtain input on how best to streamline the application process required for the credit made available in this section and RCW 82.16.0496 to further adoption of alternative fuel technologies in commercial vehicle fleets, and must incorporate the findings resulting from this outreach effort into the rules and practices it adopts to implement and administer this section and RCW 82.16.0496 to the extent permitted under law.
(15) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Alternative fuel vehicle infrastructure" means structures, machinery, and equipment necessary and integral to support a clean alternative fuel vehicle.
(b) "Auto transportation company" means any corporation or person owning, controlling, operating, or managing any motor propelled vehicle, used in the business of transporting persons for compensation over public highways within the state of Washington, between fixed points or over a regular route. For the purposes of this section, "auto transportation company" also includes the following categories of providers irrespective of whether they provide service between fixed points or over a regular route: "Private, nonprofit transportation provider" as defined in RCW 81.66.010, "charter party carrier" as defined in RCW 81.70.020, and paratransit service providers who primarily provide special needs transportation to individuals with disabilities and the elderly.
(c) "Clean alternative fuel" means electricity, dimethyl ether, hydrogen, methane, natural gas, liquefied natural gas, compressed natural gas, or propane.
(d) "Commercial vehicle" means any commercial vehicle that is purchased by a private business and that is used exclusively in the provision of commercial services or the transportation of commodities, merchandise, produce, refuse, freight, animals, or passengers, and that is displaying a Washington state license plate. All commercial vehicles that provide transportation to passengers must be operated by an auto transportation company.
(e) "Gross capitalized cost" means the agreed upon value of the commercial vehicle and including any other items a person pays over the lease term that are included in such cost.
(f) "Lease reduction factor" means the vehicle gross capitalized cost less the residual value, divided by the gross capitalized cost.
(g) "Qualifying used commercial vehicle" means vehicles that:
(i) Have an odometer reading of less than 450,000 miles;
(ii) Are less than 10 years past their original date of manufacture;
(iii) Were modified after the initial purchase with a United States environmental protection agency certified conversion that would allow the propulsion units to be principally powered by a clean alternative fuel; and
(iv) Are being sold for the first time after modification.
(h) "Residual value" means the lease-end value of the vehicle as determined by the lessor, at the end of the lease term included in the lease contract.
(16) Credits may be earned under this section from January 1, 2016, until the maximum total credit amount in subsection (1)(b) of this section is reached, except for credits for leased vehicles, which may be earned from July 1, 2016, until the maximum total credit amount in subsection (1)(b) of this section is reached.
[ 2022 c 182 s 307; 2019 c 287 s 8; 2017 c 116 s 1. Prior: 2016 c 29 s 1; 2015 3rd sp.s. c 44 s 411.]
Notes:
Intent—Effective date—2022 c 182: See notes following RCW 70A.65.240.
Effective date—2019 c 287 ss 8 and 13: "Sections 8 and 13 of this act take effect January 1, 2020." [ 2019 c 287 s 25.]
Tax preference performance statement—2019 c 287 ss 8-14: "This section is the tax preference performance statement for the tax preferences contained in sections 8 through 14, chapter 287, Laws of 2019. The performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(1) The legislature categorizes the tax preferences as ones intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).
(2) It is the legislature's specific public policy objective to increase the use of clean alternative fuel vehicles in Washington. It is the legislature's intent to establish and extend tax incentive programs for alternative fuel vehicles and related infrastructure by: (a) Reinstating the sales and use tax exemption on certain clean alternative fuel vehicles in order to reduce the price charged to customers for clean alternative fuel vehicles; (b) extending the business and occupation and public utility tax credit for clean alternative fuel commercial vehicles and expanding it to include clean alternative fuel infrastructure; (c) extending the sales and use tax exemption for electric vehicle batteries, fuel cells, and infrastructure and expanding it to include the electric battery and fuel cell components of electric buses and zero emissions buses; and (d) extending the leasehold excise tax exemption to tenants of public lands for battery and fuel cell electric vehicle infrastructure.
(3) To measure the effectiveness of the tax preferences in sections 8 through 14, chapter 287, Laws of 2019 in achieving the public policy objectives described in subsection (2) of this section, the joint legislative audit and review committee must evaluate the number of clean alternative fuel vehicles titled in the state.
(4) In order to obtain the data necessary to perform the review in subsection (3) of this section, the department of licensing and the department of revenue must provide data needed for the joint legislative audit and review committee analysis. In addition to the data source described under this subsection, the joint legislative audit and review committee may use any other data it deems necessary." [ 2019 c 287 s 7.]
Findings—Intent—2019 c 287: See note following RCW 28B.30.903.
Effective date—2017 c 116: "This act takes effect January 1, 2018." [ 2017 c 116 s 4.]
Effective date—2015 3rd sp.s. c 44: See note following RCW 46.68.395.
Short title—Findings—Tax preference performance statement—2015 3rd sp.s. c 44 ss 411 and 412: "(1) This section and sections 411 and 412 of this act may be known and cited as the clean fuel vehicle incentives act.
(2) The legislature finds that cleaner fuels reduce greenhouse gas emissions in the transportation sector and lead to a more sustainable environment. The legislature further finds that alternative fuel vehicles cost more than comparable models of conventional fuel vehicles, particularly in the commercial market. The legislature further finds the higher cost of alternative fuel vehicles incentivize companies to purchase comparable models of conventional fuel vehicles. The legislature further finds that other states provide various tax credits and exemptions. The legislature further finds incentivizing businesses to purchase cleaner, alternative fuel vehicles is a collaborative step toward meeting the state's climate and environmental goals.
(3)(a) This subsection is the tax preference performance statement for the clean alternative fuel vehicle tax credits provided in section 1, chapter 116, Laws of 2017, sections 1 and 2, chapter 29, Laws of 2016, and sections 411 and 412, chapter 44, Laws of 2015 3rd sp. sess. The performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(b) The legislature categorizes the tax preference as one intended to induce certain designated behavior by taxpayers.
(c) It is the legislature's specific public policy objective to provide a credit against business and occupation and public utility taxes to increase sales of commercial vehicles that use clean alternative fuel to ten percent of commercial vehicle sales by 2021.
(d) To measure the effectiveness of the credit provided in section 1, chapter 116, Laws of 2017, sections 1 and 2, chapter 29, Laws of 2016, and sections 411 and 412, chapter 44, Laws of 2015 3rd sp. sess. in achieving the specific public policy objective described in (c) of this subsection, the joint legislative audit and review committee must, at minimum, evaluate the changes in the number of commercial vehicles that are powered by clean alternative fuel that are registered in Washington state.
(e)(i) The department of licensing must provide data needed for the joint legislative audit and review committee's analysis in (d) of this subsection.
(ii) In addition to the data source described under (e)(i) of this subsection, the joint legislative audit and review committee may use any other data it deems necessary in performing the evaluation under (d) of this subsection." [ 2017 c 116 s 3; 2016 c 29 s 3; 2015 3rd sp.s. c 44 s 410.]

catchline: Credit—Clean alternative fuel commercial vehicles.