title: RCW 82.04.390

text:
This chapter shall not apply to gross proceeds derived from the sale of real estate. A sale of real estate does not include the gross proceeds derived from individual storage space rentals or individual storage space leases for 30 days or longer at a self-service storage facility as defined in RCW 19.150.010. This however, shall not be construed to allow a deduction of amounts received as commissions from the sale of real estate, nor as fees, handling charges, discounts, interest or similar financial charges resulting from, or relating to, real estate transactions.
[ 2025 c 423 s 302; 1961 c 15 s 82.04.390. Prior: 1959 ex.s. c 5 s 8; 1959 c 197 s 23; prior: 1945 c 249 s 2, part; 1943 c 156 s 4, part; 1941 c 178 s 6, part; 1939 c 225 s 5, part; 1937 c 227 s 4, part; 1935 c 180 s 11, part; Rem. Supp. 1945 s 8370-11, part.]
Notes:
Effective date—2025 c 423 ss 301 and 302: See note following RCW 82.04.290.
Finding—Intent—Necessity of act—2025 c 423: See notes following RCW 82.04.260.

catchline: Exemptions—Amounts derived from sale of real estate.


doc_type: statute

jurisdiction: wa

title: RCW 82.04.392

text:
This chapter shall not apply to amounts received from trust accounts to mortgage brokers for the payment of third-party costs if the accounts are operated in a manner consistent with RCW 19.146.050 and any rules adopted by the director of financial institutions.
[ 1998 c 311 s 3; 1997 c 106 s 21.]
Notes:
Intent—Retroactive application—1998 c 311 ss 1 and 3: See note following RCW 19.146.050.
Severability—1997 c 106: See note following RCW 19.146.010.

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Exemptions—Mortgage brokers' third-party provider services trust accounts.

code: rcw

unit: section

court: Washington State Legislature


title: RCW 82.04.399

text:
This chapter does not apply to amounts received from sales of academic transcripts by educational institutions.
[ 1996 c 272 s 1.]
Notes:
Effective date—1996 c 272: "This act shall take effect July 1, 1996." [ 1996 c 272 s 4.]

catchline: Exemptions—Sales of academic transcripts.


title: RCW 82.04.405

text:
(1) Except as provided in subsection (2) of this section, this chapter shall not apply to the gross income of credit unions organized under the laws of this state, any other state, or the United States.
(2)(a) Beginning October 1, 2025, if a credit union organized under the laws of this state merges or acquires a bank that is regulated by the department of financial institutions, the credit union no longer qualifies for the exemption from business and occupation tax in subsection (1) of this section and is subject to tax equal to the gross income of the credit union, multiplied by 1.2 percent.
(b) This subsection (2) does not apply to transactions for which an application has been submitted for regulatory approval prior to January 1, 2026.
[ 2025 c 423 s 104; 1998 c 311 s 4; 1970 ex.s. c 101 s 3.]
Notes:
Effective date—2025 c 423 ss 101, 103, 104, 105, 201, and 202: See note following RCW 82.04.260.
Finding—Intent—Necessity of act—2025 c 423: See notes following RCW 82.04.260.
Severability—Effective date—1970 ex.s. c 101: See notes following RCW 33.28.040.

catchline: Credit unions—Tax—Exemptions.


title: RCW 82.04.408

text:
This chapter does not apply to income received by the state housing finance commission under chapter 43.180 RCW.
[ 1983 c 161 s 25.]
Notes:
Effective dates—1983 c 161: See RCW 43.180.904.

catchline: Exemptions—Housing finance commission.


title: RCW 82.04.410

text:
This chapter shall not apply to amounts derived by persons engaged in the production and sale of hatching eggs or poultry for use in the production for sale of poultry or poultry products.
[ 1967 ex.s. c 149 s 15; 1961 c 15 s 82.04.410. Prior: 1959 c 197 s 25; prior: 1945 c 249 s 2, part; 1943 c 156 s 4, part; 1941 c 178 s 6, part; 1939 c 225 s 5, part; 1937 c 227 s 4, part; 1935 c 180 s 11, part; Rem. Supp. 1945 s 8370-11, part.]

catchline: Exemptions—Hatching eggs and poultry.


title: RCW 82.04.415

text:
This chapter shall not apply to:
(1) The cost of or charges made for labor and services performed in respect to the mining, sorting, crushing, screening, washing, hauling, and stockpiling of sand, gravel, and rock, when such sand, gravel, or rock is taken from a pit or quarry which is owned by or leased to a county or city and such sand, gravel, or rock is either stockpiled in said pit or quarry for placement or is placed on the street, road, place, or highway of the county or city by the county or city itself; or
(2) The cost of or charges for such labor and services if any such sand, gravel, or rock is sold by the county or city to a county, or a city at actual cost for placement on a publicly owned street, road, place, or highway.
The exemption provided for in this section shall not apply to the cost of or charges for such labor and services if the sand, gravel, or rock is used for other than public road purposes or is sold otherwise than as provided for in this section.
[ 1965 ex.s. c 173 s 10.]
Notes:
Effective date—1965 ex.s. c 173: See note following RCW 82.04.050.

catchline: Exemptions—Sand, gravel and rock taken from county or city pits or quarries, processing and handling costs.


title: RCW 82.04.416

text:
This chapter does not apply to amounts received from operating state route number 16 corridor transportation systems and facilities constructed and operated under chapter 47.46 RCW.
[ 1998 c 179 s 3.]
Notes:
Finding—1998 c 179: See note following RCW 35.21.718.

catchline: Exemptions—Operation of state route No. 16.


title: RCW 82.04.418

text:
The provisions of this chapter shall not apply to grants received from the state or the United States government by municipal corporations or political subdivisions of the state of Washington.
[ 1983 1st ex.s. c 66 s 2.]

catchline: Exemptions—Grants by United States government to municipal corporations or political subdivisions.


title: RCW 82.04.419

text:
This chapter shall not apply to any county, city, town, school district, or fire district activity, regardless of how financed, other than a utility or enterprise activity as defined by the state auditor pursuant to RCW 35.33.111 and 36.40.220 and upon which the tax imposed pursuant to this chapter had previously applied. Nothing contained in this section shall limit the authority of the legislature to authorize the imposition of such tax prospectively upon such activities as the legislature shall specifically designate.
[ 1983 1st ex.s. c 66 s 3.]

catchline: Exemptions—County, city, town, school district, or fire district activity.


title: RCW 82.04.4201

text:
This chapter does not apply to amounts received as lease payments paid by a seller/lessee to a lessor under a sale/leaseback agreement under RCW 81.112.300 in respect to tangible personal property used by the seller/lessee, or to the purchase amount paid by the lessee under an option to purchase at the end of the lease term.
[ 2000 2nd sp.s. c 4 s 24.]
Notes:
Findings—Construction—2000 2nd sp.s. c 4 ss 18-30: See notes following RCW 81.112.300.

catchline: Exemptions—Sales/leasebacks by regional transit authorities.


title: RCW 82.04.421

text:
(1) For the purposes of this section, "qualifying discount program" means a membership program, club, or plan that entitles the member to discounts on services or products sold by others. The term does not include any discount program which in part or in total entitles the member to discounts on services or products sold by the seller of the membership or an affiliate of the seller of the membership. "Affiliate," for the purposes of this section, means any person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the seller.
(2) Persons selling memberships in a qualifying discount program are not subject to tax under this chapter on that portion of the membership sales where the seller delivers the membership materials to the purchaser who receives them at a point outside this state.
[ 1997 c 408 s 1.]
Notes:
Effective date—1997 c 408: "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, 1997." [ 1997 c 408 s 2.]

catchline: Exemptions—Out-of-state membership sales in discount programs.


title: RCW 82.04.422

text:
(1) This chapter does not apply to amounts received by a motor vehicle dealer licensed under chapter 46.70 RCW, or a dealer licensed by any other state, for the wholesale sale of used motor vehicles at auctions to licensed dealers.
(2) This chapter does not apply to amounts derived by a new car dealer from wholesale sales of new motor vehicles to other new car dealers making sales of new motor vehicles of the same make. This exemption does not apply to amounts derived by a manufacturer, distributor, or factory branch as defined in chapter 46.70 RCW.
[ 2004 c 81 s 1; 2001 c 258 s 1.]
Notes:
Effective date—2004 c 81: "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 22, 2004]." [ 2004 c 81 s 2.]
Effective date—2001 c 258: "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, 2001." [ 2001 c 258 s 3.]

catchline: Exemptions—Wholesale sales of motor vehicles.


title: RCW 82.04.423

text:
(1) Prior to May 1, 2010, this chapter does not apply to any person in respect to gross income derived from the business of making sales at wholesale or retail if such person:
(a) Does not own or lease real property within this state; and
(b) Does not regularly maintain a stock of tangible personal property in this state for sale in the ordinary course of business; and
(c) Is not a corporation incorporated under the laws of this state; and
(d) Makes sales in this state exclusively to or through a direct seller's representative.
(2) For purposes of this section, the term "direct seller's representative" means a person who buys only consumer products on a buy-sell basis or a deposit-commission basis for resale, by the buyer or any other person, in the home or otherwise than in a permanent retail establishment, or who sells at retail, or solicits the sale at retail of, only consumer products in the home or otherwise than in a permanent retail establishment; and
(a) Substantially all of the remuneration paid to such person, whether or not paid in cash, for the performance of services described in this subsection is directly related to sales or other output, including the performance of services, rather than the number of hours worked; and
(b) The services performed by the person are performed pursuant to a written contract between such person and the person for whom the services are performed and such contract provides that the person will not be treated as an employee with respect to such purposes for federal tax purposes.
(3) Nothing in this section may be construed to imply that a person exempt from tax under this section was engaged in a business activity taxable under this chapter prior to August 23, 1983.
[ 2010 1st sp.s. c 23 s 402; 1983 1st ex.s. c 66 s 5.]
Notes:
Retroactive application—2010 1st sp.s. c 23 ss 402 and 702: "Sections 402 and 702 of this act apply both retroactively and prospectively." [ 2010 1st sp.s. c 23 s 1704.]
Application—Refunds—2010 1st sp.s. c 23 ss 702 and 1704: See note following RCW 82.04.360.
Application—Final judgments—2010 1st sp.s. c 23 s 402: "Section 402 of this act does not affect any final judgments, not subject to appeal, entered by a court of competent jurisdiction before May 1, 2010." [ 2010 1st sp.s. c 23 s 1706.]
Intent—Findings—2010 1st sp.s. c 23: "(1) A business and occupation tax exemption is provided in RCW 82.04.423 for certain out-of-state sellers that sell consumer products exclusively to or through a direct seller's representative. The intent of the legislature in enacting this exemption was to provide a narrow exemption for out-of-state businesses engaged in direct sales of consumer products, typically accomplished through in-home parties or door-to-door selling.
(2) In Dot Foods, Inc. v. Dep't of Revenue, Docket No. 81022-2 (September 10, 2009), the Washington supreme court held that the exemption in RCW 82.04.423 applied to a taxpayer: (a) That sold nonconsumer products through its representative in addition to consumer products; and (b) whose consumer products were ultimately sold at retail in permanent retail establishments.
(3) The legislature finds that most out-of-state businesses selling consumer products in this state will either be eligible for the exemption under RCW 82.04.423 or could easily restructure their business operations to qualify for the exemption. As a result, the legislature expects that the broadened interpretation of the direct sellers' exemption will lead to large and devastating revenue losses. This comes at a time when the state's existing budget is facing a two billion six hundred million dollar shortfall, which could grow, while at the same time the demand for state and state-funded services is also growing. Moreover, the legislature further finds that RCW 82.04.423 provides preferential tax treatment for out-of-state businesses over their in-state competitors and now creates a strong incentive for in-state businesses to move their operations outside Washington.
(4) Therefore, the legislature finds that it is necessary to reaffirm the legislature's intent in establishing the direct sellers' exemption and prevent the loss of revenues resulting from the expanded interpretation of the exemption by amending RCW 82.04.423 retroactively to conform the exemption to the original intent of the legislature and by prospectively ending the direct sellers' exemption as of May 1, 2010." [ 2010 1st sp.s. c 23 s 401.]
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.

catchline: Exemptions—Sales by certain out-of-state persons to or through direct seller's representatives.


title: RCW 82.04.425

text:
This chapter shall not apply to sales for resale by persons regularly engaged in the business of making sales of the type of property so sold to other persons similarly engaged in the business of selling such property where (1) the amount paid by the buyer does not exceed the amount paid by the seller to his or her vendor in the acquisition of the article and (2) the sale is made as an accommodation to the buyer to enable him or her to fill a bona fide existing order of a customer or is made within fourteen days to reimburse in kind a previous accommodation sale by the buyer to the seller; nor to sales by a wholly owned subsidiary of a person making sales at retail which are exempt under RCW 82.08.0262 when the parent corporation shall have paid the tax imposed under this chapter.
[ 2013 c 23 s 315; 1980 c 37 s 78; 1965 ex.s. c 173 s 9; 1961 c 15 s 82.04.425. Prior: 1955 c 95 s 1.]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.
Effective date—1965 ex.s. c 173: See note following RCW 82.04.050.

catchline: Exemptions—Accommodation sales.


title: RCW 82.04.4251

text:
This chapter does not apply to amounts received by a nonprofit corporation organized under chapter 24.03A RCW as payments or contributions from the state or any county, city, town, municipal corporation, quasi-municipal corporation, federally recognized Indian tribe, port district, or public corporation for the promotion of conventions and tourism.
[ 2021 c 176 s 5244; 2006 c 310 s 1.]
Notes:
Effective date—2021 c 176: See note following RCW 24.03A.005.

catchline: Exemptions—Convention and tourism promotion.


title: RCW 82.04.426

text:
(1) The tax imposed by RCW 82.04.241 does not apply to any person in respect to the manufacturing of semiconductor microchips.
(2) For the purposes of this section:
(a) "Manufacturing semiconductor microchips" means taking raw polished semiconductor wafers and embedding integrated circuits on the wafers using processes such as masking, etching, and diffusion; and
(b) "Integrated circuit" means a set of microminiaturized, electronic circuits.
(3) A person reporting under the tax rate provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(4) 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.
(5) Any person who has claimed the exemption 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 exemption is claimed.
(6) This section expires January 1, 2034, unless the contingency in RCW 82.32.790(2) occurs.
[ 2024 c 261 s 3. Prior: 2017 3rd sp.s. c 37 s 524; (2017 3rd sp.s. c 37 s 523 expired January 1, 2018); 2017 c 135 s 13; 2010 c 114 s 110; 2003 c 149 s 2.]
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.
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: "The legislature finds that the welfare of the people of the state of Washington is positively impacted through the encouragement and expansion of family wage employment in the state's manufacturing industries. The legislature further finds that targeting tax incentives to focus on key industry clusters is an important business climate strategy. The Washington competitiveness council has recognized the semiconductor industry, which includes the design and manufacture of semiconductor materials, as one of the state's existing key industry clusters. Businesses in this cluster in the state of Washington are facing increasing pressure to expand elsewhere. The sales and use tax exemptions for manufacturing machinery and equipment enacted by the 1995 legislature improved Washington's ability to compete with other states for manufacturing investment. However, additional incentives for the semiconductor cluster need to be put in place in recognition of the unique forces and global issues involved in business decisions that key businesses in this cluster face.
Therefore, the legislature intends to enact comprehensive tax incentives for the semiconductor cluster that address activities of the lead product industry and its suppliers and customers. Tax incentives for the semiconductor cluster are important in both retention and expansion of existing business and attraction of new businesses, all of which will strengthen this cluster. The legislature also recognizes that the semiconductor industry involves major investment that results in significant construction projects, which will create jobs and bring many indirect benefits to the state during the construction phase." [ 2003 c 149 s 1.]

catchline: Exemptions—Semiconductor microchips. (Contingent effective date; contingent expiration date.)


title: RCW 82.04.4261

text:
This chapter does not apply to amounts received by any person for research and development under the federal small business innovation research program (114 Stat. 2763A; 15 U.S.C. Sec. 638 et seq.).
[ 2004 c 2 s 9.]
Notes:
Effective date—2004 c 2 ss 9 and 10: "Sections 9 and 10 of this act take effect July 1, 2004." [ 2004 c 2 s 11.]

catchline: Exemptions—Federal small business innovation research program.


title: RCW 82.04.4262

text:
This chapter does not apply to amounts received by any person for research and development under the federal small business technology transfer program (115 Stat. 263; 15 U.S.C. Sec. 638 et seq.).
[ 2004 c 2 s 10.]
Notes:
Effective date—2004 c 2 ss 9 and 10: See note following RCW 82.04.4261.

catchline: Exemptions—Federal small business technology transfer program.


title: RCW 82.04.4263

text:
This chapter does not apply to income received by the life sciences discovery fund authority under *chapter 43.350 RCW.
[ 2005 c 424 s 11.]
Notes:
*Reviser's note: Chapter 43.350 RCW was repealed and/or recodified by 2019 c 83 ss 5 and 6.

catchline: Exemptions—Income received by the life sciences discovery fund authority.


title: RCW 82.04.4264

text:
(1) This chapter does not apply to amounts received by a nonprofit assisted living facility licensed under chapter 18.20 RCW for providing room and domiciliary care to residents of the assisted living facility.
(2) As used in this section:
(a) "Domiciliary care" has the meaning provided in RCW 18.20.020.
(b) "Nonprofit assisted living facility" means an assisted living facility that is operated as a religious or charitable organization, is exempt from federal income tax under 26 U.S.C. Sec. 501(c)(3), is incorporated under chapter 24.03A RCW, is operated as part of a nonprofit hospital, or is operated as part of a public hospital district.
[ 2021 c 176 s 5245; 2012 c 10 s 71; 2005 c 514 s 301.]
Notes:
Effective date—2021 c 176: See note following RCW 24.03A.005.
Application—2012 c 10: See note following RCW 18.20.010.
Effective date—2005 c 514: See note following RCW 83.100.230.
Part headings not law—Severability—2005 c 514: See notes following RCW 82.12.808.

catchline: Exemptions—Nonprofit assisted living facilities—Room and domiciliary care.


title: RCW 82.04.4265

text:
(1) This chapter does not apply to amounts received by a comprehensive cancer center to the extent the amounts are exempt from federal income tax.
(2) For the purposes of this section, "comprehensive cancer center" means a cancer center that has written confirmation that it is recognized by the national cancer institute as a comprehensive cancer center and that qualifies as an exempt organization under 26 U.S.C. Sec. 501(c)(3) as existing on July 1, 2006.
[ 2005 c 514 s 401.]
Notes:
Effective date—2005 c 514 ss 401-403: "Sections 401 through 403 of this act take effect July 1, 2006." [ 2005 c 514 s 1304.]
Part headings not law—Severability—2005 c 514: See notes following RCW 82.12.808.


title: RCW 82.04.4266

text:
(1) This chapter does not apply to the value of products or the gross proceeds of sales derived from:
(a) Manufacturing fruits or vegetables by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables; or
(b) Selling at wholesale fruits or vegetables manufactured by the seller by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables and sold to purchasers who transport in the ordinary course of business the goods out of this state. A person taking an exemption under this subsection (1)(b) must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state.
(2) For purposes of this section, "fruits" and "vegetables" do not include cannabis, useable cannabis, or cannabis-infused products.
(3) A person claiming the exemption provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(4) This section expires July 1, 2035.
[ 2023 c 422 s 3; 2022 c 16 s 142; 2020 c 139 s 5; 2015 3rd sp.s. c 6 s 202; 2014 c 140 s 9; 2012 2nd sp.s. c 6 s 201; 2011 c 2 s 202 (Initiative Measure No. 1107, approved November 2, 2010); 2010 1st sp.s. c 23 s 504; (2010 1st sp.s. c 23 s 503 expired June 10, 2010); 2010 c 114 s 111; 2006 c 354 s 3; 2005 c 513 s 1.]
Notes:
Tax preference performance statement—2023 c 422 ss 2-5: See note following RCW 82.04.4268.
Intent—Finding—2022 c 16: See note following RCW 69.50.101.
Effective dates—2020 c 272; 2017 c 323; 2015 3rd sp.s. c 6: "(1) Except as provided otherwise in this part, 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, 2015.
(2) Parts IV, VI, VIII, and XIX of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect September 1, 2015.
(3) Part X of this act takes effect October 1, 2016.
(4) Section 1105 of this act takes effect January 1, 2016.
(5) Except for section 2004 of this act, Part XX of this act takes effect January 1, 2019." [ 2020 c 272 s 5; 2017 c 323 s 301; 2015 3rd sp.s. c 6 s 2301.]
Tax preference performance statement—2015 3rd sp.s. c 6 ss 202-205: "This section is the tax preference performance statement for the agricultural processor tax exemptions in sections 202 through 205 of this act. 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 this tax preference as one intended to accomplish the general purposes indicated in RCW 82.32.808(2) (c) and (e).
(2) It is the legislature's specific public policy objective to create and retain jobs and continue providing tax relief to the food processing industry.
(3) To measure the effectiveness of the exemptions in sections 202 through 205 of this act in achieving the public policy objectives described in subsection (2) of this section, the joint legislative audit and review committee must evaluate the following:
(a) The number of businesses that claim the exemptions in sections 202 through 205 of this act;
(b) The change in total taxable income for taxpayers claiming the exemptions under sections 202 through 205 of this act;
(c) The change in total employment for taxpayers claiming the exemptions under sections 202 through 205 of this act; and
(d) For each calendar year, the total amount of exemptions claimed under sections 202 through 205 of this act as a percentage of total taxable income for taxpayers within taxable income categories.
(4) The information provided in the annual survey submitted by the taxpayers under *RCW 82.32.585, tax data collected by the department of revenue, and data collected by the employment security department is intended to provide the informational basis for the evaluation under subsection (3) of this section.
(5) In addition to the data sources described under subsection (4) of this section, the joint legislative audit and review committee may use any other data it deems necessary in performing the evaluation under subsection (3) of this section." [ 2015 3rd sp.s. c 6 s 201.]
*Reviser's note: RCW 82.32.585 was repealed by 2017 c 135 s 2, effective January 1, 2018.
Existing rights, liabilities, or obligations—Effective dates—Contingent effective dates—2012 2nd sp.s. c 6: See notes following RCW 82.04.29005.
Findings—Construction—2011 c 2 (Initiative Measure No. 1107): See notes following RCW 82.08.0293.
Expiration date—2010 1st sp.s. c 23 ss 503, 505, and 514: "Sections 503, 505, and 514 of this act expire June 10, 2010." [ 2010 1st sp.s. c 23 s 1711.]
Effective date—2010 1st sp.s. c 23 ss 504, 506, and 515: "Sections 504, 506, and 515 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect June 10, 2010." [ 2010 1st sp.s. c 23 s 1712.]
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.
Effective dates—2006 c 354: See note following RCW 82.04.4268.
Effective dates—2005 c 513: "This act takes effect July 1, 2007, except for sections 1 through 3 of this act which are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect July 1, 2005, and section 5, chapter 513, Laws of 2005, which takes effect April 30, 2007." [ 2007 c 243 s 1; 2005 c 513 s 14.]

catchline: Exemptions—Fruit and vegetable businesses. (Expires July 1, 2035.)


title: RCW 82.04.4267

text:
This chapter does not apply to amounts received by a chamber of commerce or other similar business association for administering the operation of a parking and business improvement area as defined in RCW 35.87A.110.
[ 2005 c 476 s 1.]

catchline: Exemptions—Operation of parking/business improvement areas.


title: RCW 82.04.4268

text:
(1)(a) In computing tax there may be deducted from the measure of tax, the value of products or the gross proceeds of sales derived from:
(i) Manufacturing dairy products; or
(ii) Except as provided otherwise in (b) of this subsection, selling dairy products manufactured by the seller to purchasers who either transport in the ordinary course of business the goods out of this state or purchasers who use such dairy products as an ingredient or component in the manufacturing of a dairy product. A person taking an exemption under this subsection (1)(a)(ii) must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state or sold to a manufacturer for use as an ingredient or component in the manufacturing of a dairy product.
(b) The exemption provided under (a)(ii) of this subsection does not apply to the sales of dairy products on or after July 1, 2025, where a dairy product is used by the purchaser as an ingredient or component in the manufacturing in Washington of a dairy product.
(2) "Dairy products" has the same meaning as provided in RCW 82.04.260.
(3) A person claiming the exemption provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(4) This section expires July 1, 2035.
[ 2023 c 422 s 2; 2020 c 139 s 6; 2015 3rd sp.s. c 6 s 203; 2013 2nd sp.s. c 13 s 204; 2012 2nd sp.s. c 6 s 202; 2010 c 114 s 112; 2006 c 354 s 1.]
Notes:
Tax preference performance statement—2023 c 422 ss 2-5: "(1) This section is the tax preference performance statement for the tax preferences contained in sections 2 through 5, chapter 422, Laws of 2023. This performance statement is only intended to be used for subsequent evaluation of the tax preferences. 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 these tax preferences as ones intended to create or retain jobs and provide tax relief for certain businesses or individuals as indicated in RCW 82.32.808(2) (c) and (e).
(3) It is the legislature's specific public policy objective to create and retain jobs and continue providing tax relief to the food processing industry.
(4) To measure the effectiveness of the exemptions in sections 2 through 5 of this act in achieving the public policy objectives described in subsection (3) of this section, the joint legislative audit and review committee must evaluate the following:
(a) The number of businesses that claim the exemptions in sections 2 through 5 of this act;
(b) The change in total taxable income for taxpayers claiming the exemptions under sections 2 through 5 of this act;
(c) The change in total employment for taxpayers claiming the exemptions under sections 2 through 5 of this act; and
(d) For each calendar year, the total amount of exemptions claimed under sections 2 through 5 of this act as a percentage of total taxable income for taxpayers within taxable income categories.
(5) The information provided in the annual report submitted by the taxpayers under RCW 82.32.534, tax data collected by the department of revenue, and data collected by the employment security department is intended to provide the informational basis for the evaluation under subsection (4) of this section.
(6) In addition to the data sources described under subsection (5) of this section, the joint legislative audit and review committee may use any other data it deems necessary in performing the evaluation under subsection (4) of this section." [ 2023 c 422 s 1.]
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.
Tax preference performance statement—2015 3rd sp.s. c 6 ss 202-205: See note following RCW 82.04.4266.
Intent—2013 2nd sp.s. c 13: See note following RCW 82.04.260.
Effective date—2013 2nd sp.s. c 13: See note following RCW 82.04.43393.
Existing rights, liabilities, or obligations—Effective dates—Contingent effective dates—2012 2nd sp.s. c 6: See notes following RCW 82.04.29005.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Effective dates—2006 c 354: "(1) Except as otherwise provided in this section, this act takes effect July 1, 2006.
(2) Sections 6 through 9 and 11 of this act take effect July 1, 2007.
(3) Sections 12 and 13 of this act take effect July 1, 2012." [ 2006 c 354 s 18.]

catchline: Exemptions—Dairy product businesses. (Expires July 1, 2035.)


title: RCW 82.04.4269

text:
(1) This chapter does not apply to the value of products or the gross proceeds of sales derived from:
(a) Manufacturing seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; or
(b) Selling manufactured seafood products that remain in a raw, raw frozen, or raw salted state to purchasers who transport in the ordinary course of business the goods out of this state. A person taking an exemption under this subsection (1)(b) must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state.
(2) A person claiming the exemption provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(3) This section expires July 1, 2035.
[ 2023 c 422 s 4; 2020 c 139 s 7; 2015 3rd sp.s. c 6 s 204; 2012 2nd sp.s. c 6 s 203; 2010 c 114 s 113; 2006 c 354 s 2.]
Notes:
Tax preference performance statement—2023 c 422 ss 2-5: See note following RCW 82.04.4268.
Effective dates—2015 3rd sp.s. c 6: See note following RCW 82.04.4266.
Tax preference performance statement—2015 3rd sp.s. c 6 ss 202-205: See note following RCW 82.04.4266.
Existing rights, liabilities, or obligations—Effective dates—Contingent effective dates—2012 2nd sp.s. c 6: See notes following RCW 82.04.29005.
Application—Finding—Intent—2010 c 114: See notes following RCW 82.32.534.
Effective dates—2006 c 354: See note following RCW 82.04.4268.

catchline: Exemptions—Seafood product businesses. (Expires July 1, 2035.)


title: RCW 82.04.427

text: See chapter 82.34 RCW.

catchline: Exemptions and credits—Pollution control facilities.


title: RCW 82.04.4271

text:
In computing tax due under this chapter, there may be deducted from the measure of tax all amounts received by a nonprofit youth organization:
(1) As membership fees or dues, irrespective of the fact that the payment of the membership fees or dues to the organization may entitle its members, in addition to other rights or privileges, to receive services from the organization or to use the organization's facilities; or
(2) From members of the organization for camping and recreational services provided by the organization or for the use of the organization's camping and recreational facilities.
For purposes of this section: "Nonprofit youth organization" means a nonprofit organization engaged in character building of youth which is exempt from property tax under RCW 84.36.030.
[ 1981 c 74 s 1.]

catchline: Deductions—Membership fees and certain service fees by nonprofit youth organization.


title: RCW 82.04.4272

text:
(1) In computing tax there may be deducted from the measure of tax, amounts derived from delivery charges made for the delivery of direct mail if the charges are separately stated on an invoice or similar billing document given to the purchaser.
(2) "Delivery charges" and "direct mail" have the same meanings as in RCW 82.08.010.
[ 2005 c 514 s 114.]
Notes:
Effective date—2005 c 514: "Sections 110(5), 114 through 116, 1001, 1003, 1004, 1201, 1311, and 1312 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect immediately [May 17, 2005]." [ 2005 c 514 s 1303.]
Part headings not law—Severability—2005 c 514: See notes following RCW 82.12.808.

catchline: Deductions—Direct mail delivery charges.


title: RCW 82.04.4274

text:
(1) In computing tax due under this chapter, there may be deducted from the measure of tax all amounts received by:
(a) A nonprofit property management company from the owner of property for gross wages, benefits, and payroll taxes paid to, or for, personnel performing on-site functions;
(b) A property management company from a housing authority for gross wages, benefits, and payroll taxes paid to, or for, personnel performing on-site functions; or
(c) A property management company from a limited liability company or limited partnership of which the sole managing member or sole general partner is a housing authority for gross wages, benefits, and payroll taxes paid to, or for, personnel performing on-site functions.
(2) The definitions in this subsection apply to this section.
(a) "Personnel performing on-site functions" means a person who meets all of the following conditions:
(i) The person works at the owner's property or centrally performs on-site functions for the property;
(ii) The person's duties include leasing property units, maintaining the property, preparing tenant income certification paperwork or other compliance documents required to lease the unit, collecting rents, recording rents, or performing similar activities; and
(iii) The property management company, for whom the personnel performing on-site functions works, operates under a written property management agreement.
(b) "Nonprofit property management company" means a property management company that:
(i) Is exempt from the tax under 26 U.S.C. Sec. 501(c) of the federal internal revenue code, as it exists on January 1, 2010, but only when such organization is providing property management services for low-income housing that has qualified for the property tax exemption under RCW 84.36.560; or
(ii) Is a public corporation established under RCW 35.21.730.
(c) "Housing authority" means a housing authority created pursuant to chapter 35.82 RCW.
[ 2011 1st sp.s. c 26 s 1.]
Notes:
Affect on existing rights, liabilities, obligations, and proceedings—2011 1st sp.s. c 26: "This act does not affect any existing right acquired or liability or obligation incurred under the sections amended or repealed in this act or under any rule or order adopted under those sections, nor does it affect any proceeding instituted under those sections." [ 2011 1st sp.s. c 26 s 3.]

catchline: Deductions—Nonprofit management companies—Personnel performing on-site functions.


title: RCW 82.04.4275

text:
(1) A health or social welfare organization may deduct from the measure of tax amounts received as compensation for providing child welfare services under a government-funded program.
(2) A person may deduct from the measure of tax amounts received from the state of Washington for distribution to a health or social welfare organization that is eligible to deduct the distribution under subsection (1) of this section.
(3) The following definitions apply to this section:
(a) "Child welfare services" has the same meaning as provided in RCW 74.13.020; and
(b) "Health or social welfare organization" has the meaning provided in RCW 82.04.431.
[ 2011 c 163 s 1.]
Notes:
Application—2011 c 163: "This act applies to amounts received by a taxpayer on or after August 1, 2011." [ 2011 c 163 s 2.]

catchline: Deductions—Child welfare services.


title: RCW 82.04.4276

text:
(1) In computing tax there may be deducted from the measure of tax, amounts received by a cooperative finance organization where the amounts are derived from loans to rural electric cooperatives or other nonprofit or governmental providers of utility services organized under the laws of this state.
(2) For the purposes of this section, the following definitions apply:
(a) "Cooperative finance organization" means a nonprofit organization with the primary purpose of providing, securing, or otherwise arranging financing for rural electric cooperatives.
(b) "Rural electric cooperative" means a nonprofit, customer-owned organization that provides utility services to rural areas.
(3) This section expires January 1, 2034.
[ 2023 c 317 s 2.]
Notes:
Tax preference performance statement—2023 c 317 s 2: "(1) This section is the tax preference performance statement for the tax preference contained in section 2, chapter 317, Laws of 2023. 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 provide tax relief for certain businesses or individuals, as indicated in RCW 82.32.808(2)(e).
(3) It is the legislature's specific public policy objective to reduce the tax burden on individuals and businesses imposed by the existing business and occupation tax rates.
(4) If the review finds that at least one cooperative finance organization in this state used the deduction, then the legislature intends to extend the expiration date of this tax deduction.
(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." [ 2023 c 317 s 1.]
Effective date—2023 c 317: "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, 2023." [ 2023 c 317 s 3.]

catchline: Deductions—Loans to rural electric cooperatives. (Expires January 1, 2034.)


title: RCW 82.04.4281

text:
(1) In computing tax under this chapter, a person may deduct the following from the measure of tax:
(a) Except as provided in subsection (2) of this section, amounts derived from investments that are incidental to the main purpose of the person's business. Investments are incidental to the main purpose of the person's business if the total worldwide gross income derived from such investments is less than five percent of the person's total worldwide gross income of the business annually.
(b) Amounts derived as dividends or distributions from the capital account by a parent from its subsidiary entities.
(c) Amounts derived from interest on loans between subsidiary entities and a parent entity or between subsidiaries of a common parent entity, but only if the total investment and loan income is less than five percent of gross receipts of the business annually.
(2) The following are not deductible under either subsection (1)(a) or (3) of this section, or both:
(a) Amounts received from loans, except as provided in subsection (1)(c) of this section, or the extension of credit to another, revolving credit arrangements, installment sales, the acceptance of payment over time for goods or services, or any of the foregoing that have been transferred by the originator of the same to an affiliate of the transferor; or
(b) Amounts received by a banking, lending, or security business.
(3) Except as provided in subsections (2) and (4) of this section, in computing tax under this chapter, the following persons may deduct from the measure of the tax amounts derived from such person's investments regardless of whether the investments are incidental to the main purpose of the person's business:
(a) Nonprofit organizations;
(b) Collective investment vehicles;
(c) Retirement accounts and recipients of distributions therefrom, to that extent; and
(d) Family investment vehicles and recipients of distributions therefrom, to that extent.
(4) The following are not deductible under subsection (3)(b) of this section:
(a) Amounts derived from investments of persons who are invested in a collective investment vehicle but not themselves a collective investment vehicle;
(b) Amounts received by persons as compensation for services rendered to either the collective investment vehicle or the collective investment vehicle's investors, or both;
(c) Amounts derived from sources other than investments by a collective investment vehicle; or
(d) Amounts derived from factoring.
(5) The department must, consistent with the purpose of this section, adopt rules necessary to implement this section including, but not limited to, rules that provide examples of investment income from personal investments that is not eligible for a deduction under this section by virtue of it not being income from engaging in business and thus not taxable under this chapter. Such rule making must also include examples of the tax treatment of investment income received by persons making certain investments through different types of collective investment vehicles.
(6) The definitions in this subsection apply only to this section.
(a) "Banking business" means a person engaging in business as a national or state-chartered bank, a mutual savings bank, a savings and loan association, a trust company, an alien bank, a foreign bank, a credit union, a stock savings bank, or a similar entity that is chartered under Title *30, 31, 32, or 33 RCW, or organized under Title 12 U.S.C.
(b)(i) "Collective investment vehicle" means a person who meets all the following criteria:
(A) The person's total gross income derived from its investments is at least 90 percent of the person's total worldwide gross income of the business annually;
(B) The person holds title to passive investment assets for the benefit of the person's investors and the investment decisions are made by another person who serves as the collective investment vehicle's manager or advisor; and
(C) The person accepts unrelated persons as its investors.
(ii) A collective investment vehicle may take the form of a mutual fund, collective fund, and any similar investment vehicle whether structured as a limited or general partnership, limited liability company, corporation, trust, or otherwise.
(c) "Family investment vehicle" means:
(i) The estate of any decedent;
(ii) An inter vivos or testamentary trust, provided that the grantor and all beneficiaries are either members of the family as defined in RCW 83.100.046, or nonprofit organizations, or both;
(iii) A qualified tuition program established under the provisions of the internal revenue code section 529; or
(iv) A coverdell education savings account established under the provisions of the internal revenue code section 530.
(d) "Internal revenue code" means the United States internal revenue code of 1986, as amended, as of January 1, 2026, or such subsequent date as the department may provide by rule consistent with this chapter.
(e) "Investments" includes, but is not limited to, securities, trading account assets, federal funds, options, futures contracts, forward contracts, notional principal contracts, equities, foreign currency transactions, fixed income instruments, derivative instruments, and commodities.
(f) "Lending business" means a person engaged in the business of making secured or unsecured loans of money, or extending credit, and (i) more than one-half of the person's gross income is earned from such activities and (ii) more than one-half of the person's total expenditures are incurred in support of such activities.
(g) The terms "loan" and "extension of credit" do not include ownership of or trading in publicly traded debt instruments, or substantially equivalent instruments offered in a private placement.
(h) "Nonprofit organization" has the same meaning as in RCW 82.04.3651.
(i) "Retirement account" means any qualified plan established under any of the provisions of sections 401 through 409, inclusive, of the internal revenue code.
(j) "Security business" means a person, other than an issuer, who is engaged in the business of effecting transactions in securities as a broker, dealer, or broker-dealer, as those terms are defined in the securities act of Washington, chapter 21.20 RCW, or the federal securities act of 1933. "Security business" does not include any company excluded from the definition of broker or dealer under the federal investment company act of 1940 or any entity that is not an investment company by reason of sections 3(c)(1) and 3(c)(3) through 3(c)(14) thereof.
[ 2025 c 420 s 402; 2007 c 54 s 9; 2002 c 150 s 2; 1980 c 37 s 2. Formerly RCW 82.04.430(1).]
Notes:
*Reviser's note: Title 30 RCW was recodified and/or repealed pursuant to 2014 c 37, effective January 5, 2015.
Finding—Intent—2025 c 420 s 402: "The legislature finds that the decision of the state supreme court in Antio, LLC v. Department of Revenue could lead to uncertainty insofar as it affirms that the business and occupation tax deduction provided in RCW 82.04.4281 for the investment income of persons is only applicable if such income is from investments that are incidental to the main purpose of a person's business, without providing a bright line rule for what constitutes incidental to the main purpose of the person's business. The legislature intends, by adopting this revision of the statute, to avoid uncertainty and provide clarity around what incidental to the main purpose of the business means and, by extension, what income qualifies for the business and occupation tax deduction provided in RCW 82.04.4281 for investment income.
The legislature also intends to make it clear that amounts received by individuals from personal investments are generally not considered amounts received from engaging in business and therefore are not subject to the business and occupation tax. To that end, the legislature directs the department of revenue to provide guidance on what constitutes income from personal investments that are not considered engaging in business and thus not subject to the business and occupation tax.
The legislature further intends to make it clear that nondeductible investment income is subject to the service and other activities business and occupation tax classification and should be apportioned in accordance with RCW 82.04.462." [ 2025 c 420 s 401.]
Effective date—2025 c 420 ss 114, 201, 301, 401, and 402: See note following RCW 82.32.875.
Tax preference performance statement exemption—Automatic expiration date exemption—Necessity of act—2025 c 420: See notes following RCW 82.04.230.
Severability—2007 c 54: See note following RCW 82.04.050.
Findings—Intent—2002 c 150: "The legislature finds that the application of the business and occupation tax deductions provided in RCW 82.04.4281 for investment income of persons deemed to be "other financial businesses" has been the subject of uncertainty, and therefore, disagreement and litigation between taxpayers and the state. The legislature further finds that the decision of the state supreme court in Simpson Investment Co. v. Department of Revenue could lead to a restrictive, narrow interpretation of the deductibility of investment income for business and occupation tax purposes. As a result, the legislature directed the department of revenue to work with affected businesses to develop a revision of the statute that would provide certainty and stability for taxpayers and the state. The legislature intends, by adopting this recommended revision of the statute, to provide a positive environment for capital investment in this state, while continuing to treat similarly situated taxpayers fairly." [ 2002 c 150 s 1.]
Effective date—2002 c 150: "This act takes effect July 1, 2002." [ 2002 c 150 s 3.]
Finding—Intent on application of deduction—2001 c 320: "The legislature finds that the application of the business and occupation tax deduction provided in RCW 82.04.4281 for investment income of persons other than those engaging in banking, loan, security, or other financial businesses has been the subject of disagreement between taxpayers and the state. Decisions of the supreme court have provided some broad guidelines and principles for interpretation of the deduction provided in RCW 82.04.4281, but these decisions have not provided the certainty and clarity that is desired by taxpayers and the state. Therefore, it is the intent of the legislature to delay change in the manner or extent of taxation of the investment income until definitions or standards can be developed and enacted by the legislature." [ 2001 c 320 s 18.]
Reviser's note: 2001 c 320 s 19, which was vetoed May 15, 2001, would have implemented the intent in this section.
Report to legislature—2001 c 320: "The department of revenue shall report to the fiscal committees of the legislature by November 30, 2001, on the progress made in working with affected businesses on potential amendments to RCW 82.04.4281 which would clarify the application of RCW 82.04.4281 to other financial businesses." [ 2001 c 320 s 20.]
Intent—1980 c 37: "The separation of sales tax exemption, use tax exemption, and business and occupation deduction sections into shorter sections is intended to improve the readability and facilitate the future amendment of these sections. This separation shall not change the meaning of any of the exemptions or deductions involved." [ 1980 c 37 s 1.]

catchline: Deductions—Investments, dividends, interest on loans—Rules.


title: RCW 82.04.4282

text:
In computing tax there may be deducted from the measure of tax amounts derived from bona fide (1) initiation fees, (2) dues, (3) contributions, (4) donations, (5) tuition fees, (6) charges made by a nonprofit trade or professional organization for attending or occupying space at a trade show, convention, or educational seminar sponsored by the nonprofit trade or professional organization, which trade show, convention, or educational seminar is not open to the general public, (7) charges made for operation of privately operated kindergartens, and (8) endowment funds. This section may not be construed to exempt any person, association, or society from tax liability upon selling tangible personal property, digital goods, digital codes, or digital automated services, or upon providing facilities or other services for which a special charge is made to members or others. If dues are in exchange for any significant amount of goods or services rendered by the recipient thereof to members without any additional charge to the member, or if the dues are graduated upon the amount of goods or services rendered, the value of such goods or services shall not be considered as a deduction under this section.
[ 2009 c 535 s 410; 1994 c 124 s 3; 1989 c 392 s 1; 1980 c 37 s 3. Formerly RCW 82.04.430(2).]
Notes:
Intent—Construction—2009 c 535: See notes following RCW 82.04.192.
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Fees, dues, charges.


title: RCW 82.04.4283

text:
In computing tax there may be deducted from the measure of tax the amount of cash discount actually taken by the purchaser. This deduction is not allowed in arriving at the taxable amount under the extractive or manufacturing classifications with respect to articles produced or manufactured, the reported values of which, for the purposes of this tax, have been computed according to the provisions of RCW 82.04.450.
[ 1980 c 37 s 4. Formerly RCW 82.04.430(3).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Cash discount taken by purchaser.


title: RCW 82.04.4284

text:
(1) In computing tax there may be deducted from the measure of tax bad debts, as that term is used in 26 U.S.C. Sec. 166, as amended or renumbered as of January 1, 2003, on which tax was previously paid.
(2) For purposes of this section, "bad debts" do not include:
(a) Amounts due on property that remains in the possession of the seller until the full purchase price is paid;
(b) Expenses incurred in attempting to collect debt;
(c) Sales or use taxes payable to a seller; and
(d) Repossessed property.
(3) If a deduction is taken for a bad debt and the debt is subsequently collected in whole or in part, the tax on the amount collected must be paid and reported on the return filed for the period in which the collection is made.
(4) Payments on a previously claimed bad debt must be applied under RCW 82.08.037(4) and 82.12.037, according to such rules as the department may prescribe.
[ 2004 c 153 s 307; 1980 c 37 s 5. Formerly RCW 82.04.430(4).]
Notes:
Retroactive effective date—Effective date—2004 c 153: See note following RCW 82.08.0293.
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Bad debts.


title: RCW 82.04.4285

text:
In computing tax there may be deducted from the measure of tax so much of the sale price of fuel as constitutes the amount of tax imposed by the state under chapter 82.38 RCW or the United States government, under 26 U.S.C., Subtitle D, chapters 31 and 32, upon the sale thereof.
[ 2013 c 225 s 639; 1998 c 176 s 3; 1980 c 37 s 6. Formerly RCW 82.04.430(5).]
Notes:
Effective date—2013 c 225: See note following RCW 82.38.010.
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Motor vehicle fuel and special fuel taxes.


title: RCW 82.04.4286

text:
In computing tax there may be deducted from the measure of tax amounts derived from business which the state is prohibited from taxing under the Constitution of this state or the Constitution or laws of the United States.
[ 1980 c 37 s 7. Formerly RCW 82.04.430(6).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Nontaxable business.


title: RCW 82.04.4287

text:
In computing tax there may be deducted from the measure of tax amounts derived by any person as compensation for the receiving, washing, sorting, and packing of fresh perishable horticultural products and the material and supplies used therein when performed for the person exempted in RCW 82.04.330, either as agent or as independent contractor.
[ 1980 c 37 s 8. Formerly RCW 82.04.430(7).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.
Sales and use tax exemption for materials and supplies used in packing horticultural products: RCW 82.08.0311 and 82.12.0311.

catchline: Deductions—Compensation for receiving, washing, etc., horticultural products for person exempt under RCW 82.04.330—Materials and supplies used.


title: RCW 82.04.4289

text:
This chapter does not apply to amounts derived as compensation for services rendered to patients or from sales of drugs for human use pursuant to a prescription furnished as an integral part of services rendered to patients by a kidney dialysis facility operated as a nonprofit corporation, a nonprofit hospice agency licensed under chapter 70.127 RCW, and nursing homes and homes for unwed mothers operated as religious or charitable organizations, but only if no part of the net earnings received by such an institution inures directly or indirectly, to any person other than the institution entitled to deduction hereunder. "Prescription" and "drug" have the same meaning as in RCW 82.08.0281.
[ 2003 c 168 s 402; 1998 c 325 s 1; 1993 c 492 s 305; 1981 c 178 s 2; 1980 c 37 s 10. Formerly RCW 82.04.430(9).]
Notes:
Effective dates—Part headings not law—2003 c 168: See notes following RCW 82.08.010.
Findings—Intent—1993 c 492: See notes following RCW 43.20.050.
Short title—Savings—Reservation of legislative power—Effective dates—1993 c 492: See RCW 43.72.910 through 43.72.915.
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Exemption—Compensation for patient services or attendant sales of drugs dispensed pursuant to prescription by certain nonprofit organizations.


title: RCW 82.04.4290

text:
(1) A health or social welfare organization may deduct from the measure of tax amounts received as compensation for providing mental health services or substance use disorder treatment services under a government-funded program.
(2) A behavioral health administrative services organization may deduct from the measure of tax amounts received from the state of Washington for distribution to a health or social welfare organization that is eligible to deduct the distribution under subsection (1) of this section.
(3) A person claiming a deduction under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
(4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Behavioral health administrative services organization" has the same meaning as provided in RCW 71.24.025.
(b) "Health or social welfare organization" has the same meaning as provided in RCW 82.04.431.
(c) "Mental health services" means mental health services as described in chapter 71.24 RCW.
(d) "Substance use disorder treatment services" means substance use disorder treatment services as described in chapter 71.24 RCW.
(5) This section expires January 1, 2032.
[ 2021 c 124 s 3.]
Notes:
Finding—Intent—2021 c 124: "The legislature finds that COVID-19 has had significant impacts on behavioral health. The legislature previously had a feature of its tax system that exempted government-funded behavioral health services from paying business and occupation tax in order for more tax dollars to be utilized in providing health services. The legislature intends to reenact that preference in light of increased behavioral health needs for the foreseeable future, and in recognition that treatment reduces costs to the government in other services." [ 2021 c 124 s 1.]
Tax preference performance statement—2021 c 124: "(1) This section is the tax preference performance statement for the tax preference contained in section 3, chapter 124, 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, reducing taxes so more money can go directly to behavioral health services, as indicated in RCW 82.32.808(2)(f).
(3) It is the legislature's specific public policy objective to support behavioral health services that can prevent more serious and costly health issues.
(4) If a review finds that the amount of funding available for behavioral health services by these taxpayers increased, then the legislature intends to extend the expiration date of the 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 124 s 2.]
Effective date—2021 c 124: "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 [April 26, 2021]." [ 2021 c 124 s 4.]

catchline: Deductions—Mental health services or substance use disorder treatment services. (Expires January 1, 2032.)


title: RCW 82.04.4291

text:
In computing tax there may be deducted from the measure of tax amounts derived by a political subdivision of the state of Washington from another political subdivision of the state of Washington as compensation for services which are within the purview of RCW 82.04.290.
[ 1980 c 37 s 11. Formerly RCW 82.04.430(10).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Compensation received by a political subdivision from another political subdivision for services taxable under RCW 82.04.290.


title: RCW 82.04.4292

text:
(1) In computing tax there may be deducted from the measure of tax by those engaged in banking, loan, security or other financial businesses, interest received on investments or loans primarily secured by first mortgages or trust deeds on nontransient residential properties.
(2) Interest deductible under this section includes the portion of fees charged to borrowers, including points and loan origination fees, that is recognized over the life of the loan as an adjustment to yield in the taxpayer's books and records according to generally accepted accounting principles.
(3) Subsections (1) and (2) of this section notwithstanding, the following is a nonexclusive list of items that are not deductible under this section:
(a) Fees for specific services such as: Document preparation fees; finder fees; brokerage fees; title examination fees; fees for credit checks; notary fees; loan application fees; interest lock-in fees if the loan is not made; servicing fees; and similar fees or amounts;
(b) Fees received in consideration for an agreement to make funds available for a specific period of time at specified terms, commonly referred to as commitment fees;
(c) Any other fees, or portion of a fee, that is not recognized over the life of the loan as an adjustment to yield in the taxpayer's books and records according to generally accepted accounting principles;
(d) Gains on the sale of valuable rights such as service release premiums, which are amounts received when servicing rights are sold; and
(e) Gains on the sale of loans, except deferred loan origination fees and points deductible under subsection (2) of this section, are not to be considered part of the proceeds of sale of the loan.
(4) Notwithstanding subsection (3) of this section, in computing tax there may be deducted from the measure of tax by those engaged in banking, loan, security, or other financial businesses, amounts received for servicing loans primarily secured by first mortgages or trust deeds on nontransient residential properties, including such loans that secure mortgage-backed or mortgage-related securities, but only if:
(a)(i) The loans were originated by the person claiming a deduction under this subsection (4) and that person either sold the loans on the secondary market or securitized the loans and sold the securities on the secondary market; or
(ii)(A) The person claiming a deduction under this subsection (4) acquired the loans from the person that originated the loans through a merger or acquisition of substantially all of the assets of the person who originated the loans, or the person claiming a deduction under this subsection (4) is affiliated with the person that originated the loans. For purposes of this subsection, "affiliated" means under common control. "Control" means the possession, directly or indirectly, of more than fifty percent of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise; and
(B) Either the person who originated the loans or the person claiming a deduction under this subsection (4) sold the loans on the secondary market or securitized the loans and sold the securities on the secondary market; and
(b) The amounts received for servicing the loans are determined by a percentage of the interest paid by the borrower and are only received if the borrower makes interest payments.
(5) The deductions provided in this section do not apply to persons subject to tax under RCW 82.04.29005.
(6) By June 30, 2015, the joint legislative audit and review committee must review the deductions provided in this section in accordance with RCW 43.136.055 and make a recommendation as to whether the deductions should be continued without modification, modified, or terminated immediately.
[ 2012 2nd sp.s. c 6 s 102; 2010 1st sp.s. c 23 s 301; 1980 c 37 s 12. Formerly RCW 82.04.430(11).]
Notes:
Existing rights, liabilities, or obligations—Effective dates—Contingent effective dates—2012 2nd sp.s. c 6: See notes following RCW 82.04.29005.
Effective date—2010 1st sp.s. c 23: "Parts III and XIII and sections 101 through 106, 108 through 112, 501 through 503, 505, 507, 510 through 514, 516 through 519, 901, 903 through 911, and 1201 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and take effect June 1, 2010." [ 2010 1st sp.s. c 23 s 1709.]
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Interest on investments or loans secured by mortgages or deeds of trust.


title: RCW 82.04.4293

text:
In computing tax there may be deducted from the measure of tax by those engaged in banking, loan, security or other financial businesses, amounts derived from interest paid on all obligations of the state of Washington, its political subdivisions, and municipal corporations organized pursuant to the laws thereof.
[ 1980 c 37 s 13. Formerly RCW 82.04.430(12).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Interest on obligations of the state, its political subdivisions, and municipal corporations.


title: RCW 82.04.4294

text:
In computing tax there may be deducted from the measure of tax amounts derived as interest on loans to bona fide farmers and ranchers, producers or harvesters of aquatic products, or their cooperatives by a lending institution which is owned exclusively by its borrowers or members and which is engaged solely in the business of making loans and providing finance-related services to bona fide farmers and ranchers, producers or harvesters of aquatic products, their cooperatives, rural residents for housing, or persons engaged in furnishing farm-related or aquatic-related services to these individuals or entities.
[ 1980 c 37 s 14. Formerly RCW 82.04.430(13).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Interest on loans to farmers and ranchers, producers or harvesters of aquatic products, or their cooperatives.


title: RCW 82.04.4295

text:
In computing tax there may be deducted from the measure of tax by persons subject to payment of the tax on manufacturers pursuant to RCW 82.04.240, the value of articles to the extent of manufacturing activities completed outside the United States, if:
(1) Any additional processing of such articles in this state consists of minor final assembly only; and
(2) In the case of domestic manufacture of such articles, can be and normally is done at the place of initial manufacture; and
(3) The total cost of the minor final assembly does not exceed two percent of the value of the articles; and
(4) The articles are sold and shipped outside the state.
[ 1980 c 37 s 15. Formerly RCW 82.04.430(14).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Manufacturing activities completed outside the United States.


title: RCW 82.04.4296

text:
In computing tax there may be deducted from the measure of tax that portion of amounts received by any funeral home licensed to do business in this state which is received as reimbursements for expenditures (for goods supplied or services rendered by a person not employed by or affiliated or associated with the funeral home) and advanced by such funeral home as an accommodation to the persons paying for a funeral, so long as such expenditures and advances are billed to the persons paying for the funeral at only the exact cost thereof and are separately itemized in the billing statement delivered to such persons.
[ 1980 c 37 s 16. Formerly RCW 82.04.430(15).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Reimbursement for accommodation expenditures by funeral homes.


title: RCW 82.04.4297

text:
In computing tax there may be deducted from the measure of tax amounts received from the United States or any instrumentality thereof or from the state of Washington or any municipal corporation or political subdivision thereof as compensation for, or to support, health or social welfare services rendered by a health or social welfare organization, as defined in RCW 82.04.431, or by a municipal corporation or political subdivision, except deductions are not allowed under this section for amounts that are received under an employee benefit plan.
[ 2011 1st sp.s. c 19 s 2; 2002 c 314 s 3; 2001 2nd sp.s. c 23 s 2; 1988 c 67 s 1; 1980 c 37 s 17. Formerly RCW 82.04.430(16).]
Notes:
Application—2011 1st sp.s. c 19: "This act applies to amounts received by a taxpayer on or after August 1, 2011." [ 2011 1st sp.s. c 19 s 4.]
Findings—Refund of taxes—Effective date—2002 c 314: See notes following RCW 82.04.4311.
Findings—2001 2nd sp.s. c 23: "The legislature finds that the deduction under the business and occupation tax statutes for compensation from public entities for health or social welfare services was intended to provide government with greater purchasing power when government provides financial support for the provision of health or social welfare services to benefited classes of persons. The legislature also finds that both the legislature and the United States congress have in recent years modified government-funded health care programs to encourage participation by beneficiaries in highly regulated managed care programs operated by persons who act as intermediaries between government entities and health or social welfare organizations. The legislature further finds that the objective of these changes is again to extend the purchasing power of scarce government health care resources, but that this objective would be thwarted to a significant degree if the business and occupation tax deduction were lost by health or social welfare organizations solely on account of their participation in managed care for government-funded health programs. In keeping with the original purpose of the health or social welfare deduction, it is desirable to ensure that compensation received from government sources through contractual managed care programs also be deductible." [ 2001 2nd sp.s. c 23 s 1.]
Effective date—2001 2nd sp.s. c 23: "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 [July 13, 2001]." [ 2001 2nd sp.s. c 23 s 4.]
Intent—1980 c 37: See note following RCW 82.04.4281.
"Health or social welfare organization" defined—Conditions for exemption—"Health or social welfare services" defined: RCW 82.04.431.

catchline: Deductions—Compensation from public entities for health or social welfare services—Exception.


title: RCW 82.04.4298

text:
(1) In computing tax there may be deducted from the measure of tax amounts used solely for repair, maintenance, replacement, management, or improvement of the residential structures and commonly held property, but excluding property where fees or charges are made for use by the public who are not guests accompanied by a member, which are derived by:
(a) A cooperative housing association, corporation, or partnership from a person who resides in a structure owned by the cooperative housing association, corporation, or partnership;
(b) An association of owners of property as defined in RCW 64.32.010, as now or hereafter amended, from a person who is an apartment owner as defined in RCW 64.32.010; or
(c) An association of owners of residential property from a person who is a member of the association. "Association of owners of residential property" means any organization of all the owners of residential property in a defined area who all hold the same property in common within the area.
(2) For the purposes of this section "commonly held property" includes areas required for common access such as reception areas, halls, stairways, parking, etc., and may include recreation rooms, swimming pools and small parks or recreation areas; but is not intended to include more grounds than are normally required in a residential area, or to include such extensive areas as required for golf courses, campgrounds, hiking and riding areas, boating areas, etc.
(3) To qualify for the deductions under this section:
(a) The salary or compensation paid to officers, managers, or employees must be only for actual services rendered and at levels comparable to the salary or compensation of like positions within the county wherein the property is located;
(b) Dues, fees, or assessments in excess of amounts needed for the purposes for which the deduction is allowed must be rebated to the members of the association;
(c) Assets of the association or organization must be distributable to all members and must not inure to the benefit of any single member or group of members.
[ 1980 c 37 s 18. Formerly RCW 82.04.430(17).]
Notes:
Intent—1980 c 37: See note following RCW 82.04.4281.
PDF
RCW 82.04.4298
Deductions—Repair, maintenance, replacement, management, or improvement of residential structures and common elements—Eligible organizations. (Effective January 1, 2028.)
(1) In computing tax there may be deducted from the measure of tax amounts used solely for repair, maintenance, replacement, management, or improvement of the residential structures and common elements, but excluding property where fees or charges are made for use by the public who are not guests accompanied by a member, which are derived by:
(a) A cooperative, corporation, or partnership from a person who resides in a structure owned by the cooperative, corporation, or partnership;
(b) A condominium from a person who is a unit owner; or
(c) A plat community or miscellaneous community from a unit owner.
(2) For the purposes of this section "common elements," "condominium," "cooperative," "plat community," and "miscellaneous community" have the meaning given in RCW 64.90.010.
(3) To qualify for the deductions under this section:
(a) The salary or compensation paid to officers, managers, or employees must be only for actual services rendered and at levels comparable to the salary or compensation of like positions within the county wherein the property is located;
(b) Dues, fees, or assessments in excess of amounts needed for the purposes for which the deduction is allowed must be rebated to the members of the association;
(c) Assets of the association or organization must be distributable to all members and must not inure to the benefit of any single member or group of members.
[ 2024 c 321 s 432; 1980 c 37 s 18. Formerly RCW 82.04.430(17).]
Notes:
Effective dates—2024 c 321 ss 319 and 401-432: See note following RCW 64.90.485.
Intent—1980 c 37: See note following RCW 82.04.4281.

catchline: Deductions—Repair, maintenance, replacement, etc., of residential structures and commonly held property—Eligible organizations. (Effective until January 1, 2028.)


title: RCW 82.04.431

text:
(1) The term "health or social welfare organization" means an organization, including any community action council, which renders health or social welfare services as defined in subsection (2) of this section, which is a domestic or foreign nonprofit corporation under chapter 24.03A RCW and which is managed by a governing board of not less than eight individuals none of whom is a paid employee of the organization or which is a corporation sole under chapter 24.12 RCW. Health or social welfare organization does not include a corporation providing professional services as authorized in chapter 18.100 RCW. In addition a corporation in order to be exempt under RCW 82.04.4297 must satisfy the following conditions:
(a) No part of its income may be paid directly or indirectly to its members, stockholders, officers, directors, or trustees except in the form of services rendered by the corporation in accordance with its purposes and bylaws;
(b) Salary or compensation paid to its officers and executives must be only for actual services rendered, and at levels comparable to the salary or compensation of like positions within the public service of the state;
(c) Assets of the corporation must be irrevocably dedicated to the activities for which the exemption is granted and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of any member or individual except a nonprofit organization, association, or corporation which also would be entitled to the exemption;
(d) The corporation must be duly licensed or certified where licensing or certification is required by law or regulation;
(e) The amounts received qualifying for exemption must be used for the activities for which the exemption is granted;
(f) Services must be available regardless of race, color, national origin, or ancestry; and
(g) The director of revenue must have access to its books in order to determine whether the corporation is exempt from taxes within the intent of RCW 82.04.4297 and this section.
(2) The term "health or social welfare services" includes and is limited to:
(a) Mental health, drug, or alcoholism counseling or treatment;
(b) Family counseling;
(c) Health care services;
(d) Therapeutic, diagnostic, rehabilitative, or restorative services for the care of the sick, aged, or physically, developmentally, or emotionally-disabled individuals;
(e) Activities which are for the purpose of preventing or ameliorating juvenile delinquency or child abuse, including recreational activities for those purposes;
(f) Care of orphans or foster children;
(g) Day care of children;
(h) Employment development, training, and placement;
(i) Legal services to the indigent;
(j) Weatherization assistance or minor home repair for low-income homeowners or renters;
(k) Assistance to low-income homeowners and renters to offset the cost of home heating energy, through direct benefits to eligible households or to fuel vendors on behalf of eligible households;
(l) Community services to low-income individuals, families, and groups, which are designed to have a measurable and potentially major impact on causes of poverty in communities of the state; and
(m) Temporary medical housing, as defined in RCW 82.08.997, if the housing is provided only:
(i) While the patient is receiving medical treatment at a hospital required to be licensed under RCW 70.41.090 or at an outpatient clinic associated with such hospital, including any period of recuperation or observation immediately following such medical treatment; and
(ii) By a person that does not furnish lodging or related services to the general public.
[ 2021 c 176 s 5246; 2011 1st sp.s. c 19 s 3; 2008 c 137 s 1; 1986 c 261 s 6; 1985 c 431 s 3; 1983 1st ex.s. c 66 s 1; 1980 c 37 s 80; 1979 ex.s. c 196 s 6.]
Notes:
Effective date—2021 c 176: See note following RCW 24.03A.005.
Application—2011 1st sp.s. c 19: See note following RCW 82.04.4297.
Effective date—2008 c 137: See note following RCW 82.08.997.
Intent—1980 c 37: See note following RCW 82.04.4281.
Effective date—1979 ex.s. c 196: See note following RCW 82.04.240.

catchline: "Health or social welfare organization" defined—Conditions for exemption—"Health or social welfare services" defined.


title: RCW 82.04.4311

text:
(1) A public hospital that is owned by a municipal corporation or political subdivision, or a nonprofit hospital, or a nonprofit community health center, or a network of nonprofit community health centers, that qualifies as a health and social welfare organization as defined in RCW 82.04.431, may deduct from the measure of tax amounts received as compensation for health care services covered under the federal medicare program authorized under Title XVIII of the federal social security act; medical assistance, children's health, or other program under chapter 74.09 RCW; or for the state of Washington basic health plan under chapter 70.47 RCW. The deduction authorized by this section does not apply to amounts received from patient copayments or patient deductibles.
(2) As used in this section, "community health center" means a federally qualified health center as defined in 42 U.S.C. 1396d as existing on August 1, 2005.
[ 2005 c 86 s 1; 2002 c 314 s 2.]
Notes:
Effective date—2005 c 86: "This act takes effect August 1, 2005." [ 2005 c 86 s 2.]
Findings—2002 c 314: "The legislature finds that the provision of health services to those people who receive federal or state subsidized health care benefits by reason of age, disability, or lack of income is a recognized, necessary, and vital governmental function. As a result, the legislature finds that it would be inconsistent with that governmental function to tax amounts received by a public hospital or nonprofit hospital qualifying as a health and social welfare organization, when the amounts are paid under a health service program subsidized by federal or state government. Further, the tax status of these amounts should not depend on whether the amounts are received directly from the qualifying program or through a managed health care organization under contract to manage benefits for a qualifying program. Therefore, the legislature adopts this act to provide a clear and understandable deduction for these amounts, and to provide refunds for taxes paid as specified in section 4 of this act." [ 2002 c 314 s 1.]
Refund of taxes—2002 c 314: "A public hospital owned by a municipal corporation or political subdivision, or a nonprofit hospital that qualifies as a health and social welfare organization under RCW 82.04.431, is entitled to:
(1) A refund of business and occupation tax paid between January 1, 1998, and April 2, 2002, on amounts that would be deductible under section 2 of this act; and
(2) A waiver of tax liability for accrued, but unpaid taxes that would be deductible under section 2 of this act." [ 2002 c 314 s 4.]
Effective date—2002 c 314: "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 [April 2, 2002]." [ 2002 c 314 s 5.]

catchline: Deductions—Compensation received under the federal medicare program by certain hospitals or health centers.


title: RCW 82.04.432

text:
In computing the tax imposed by this chapter, municipal sewerage utilities and other public corporations imposing and collecting fees or charges for sewer service may deduct from the measure of the tax, amounts paid to another municipal corporation or governmental agency for sewerage interception, treatment or disposal.
[ 1967 ex.s. c 149 s 17.]

catchline: Deductions—Municipal sewer service fees or charges.


title: RCW 82.04.4327

text:
In computing tax under this chapter, an artistic or cultural organization may deduct from the measure of tax:
(1) All amounts received by the artistic or cultural organization; and
(2) The value of articles manufactured by the artistic or cultural organization solely for use by the organization in displaying art objects or presenting artistic or cultural exhibitions, performances, or programs for attendance or viewing by the general public.
[ 2020 c 139 s 8; 1985 c 471 s 6.]
Notes:
Severability—Effective date—1985 c 471: See notes following RCW 82.04.260.
"Artistic or cultural organization" defined: RCW 82.04.4328.

catchline: Deductions—Artistic and cultural organizations.


title: RCW 82.04.4328

text:
(1) For the purposes of RCW 82.04.4327, 82.08.031, and 82.12.031, the term "artistic or cultural organization" means an organization that is organized and operated exclusively for the purpose of providing artistic or cultural exhibitions, presentations, or performances or cultural or art education programs, as defined in subsection (2) of this section, for viewing or attendance by the general public. The organization must be a nonprofit corporation under chapter 24.03A RCW and managed by a governing board of not less than eight individuals none of whom is a paid employee of the organization or by a corporation sole under chapter 24.12 RCW. In addition, to qualify for deduction or exemption from taxation under RCW 82.04.4327, 82.08.031, and 82.12.031, the corporation must satisfy the following conditions:
(a) No part of its income may be paid directly or indirectly to its members, stockholders, officers, directors, or trustees except in the form of services rendered by the corporation in accordance with its purposes and bylaws;
(b) Salary or compensation paid to its officers and executives must be only for actual services rendered, and at levels comparable to the salary or compensation of like positions within the state;
(c) Assets of the corporation must be irrevocably dedicated to the activities for which the exemption is granted and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of any member or individual except a nonprofit organization, association, or corporation which also would be entitled to the exemption;
(d) The corporation must be duly licensed or certified when licensing or certification is required by law or regulation;
(e) The amounts received that qualify for exemption must be used for the activities for which the exemption is granted;
(f) Services must be available regardless of race, color, national origin, or ancestry; and
(g) The director of revenue must have access to its books in order to determine whether the corporation is exempt from taxes.
(2) The term "artistic or cultural exhibitions, presentations, or performances or cultural or art education programs" includes and is limited to:
(a) An exhibition or presentation of works of art or objects of cultural or historical significance, such as those commonly displayed in art or history museums;
(b) A musical or dramatic performance or series of performances; or
(c) An educational seminar or program, or series of such programs, offered by the organization to the general public on an artistic, cultural, or historical subject.
[ 2021 c 176 s 5247; 2020 c 139 s 9; 1985 c 471 s 7; 1981 c 140 s 6.]
Notes:
Effective date—2021 c 176: See note following RCW 24.03A.005.
Severability—Effective date—1985 c 471: See notes following RCW 82.04.260.

catchline: "Artistic or cultural organization" defined.


title: RCW 82.04.433

text:
(1) In computing tax there may be deducted from the measure of tax imposed under RCW 82.04.250 and 82.04.270 amounts derived from sales of fuel for consumption outside the territorial waters of the United States, by vessels used primarily in foreign commerce.
(2) The deduction in subsection (1) of this section does not apply with respect to the tax imposed under RCW 82.04.240, whether the value of the fuel under that tax is measured by the gross proceeds derived from the sale thereof or otherwise under RCW 82.04.450.
[ 2009 c 494 s 2; 1985 c 471 s 16.]
Notes:
Intent—Finding—2009 c 494: "(1) Through this act the legislature intends to address the taxation of persons manufacturing and/or selling bunker fuel. Bunker fuel is fuel intended for consumption outside the waters of the United States by vessels in foreign commerce. Although the state has historically collected tax from bunker fuel manufacturers, recently questions have arisen whether the manufacture of bunker fuel is subject to business and occupation tax under RCW 82.04.240. Pursuant to this act, the activity is taxable under RCW 82.04.240.
(2) The legislature finds that at the time the deduction allowed under RCW 82.04.433 was enacted in 1985, it was intended to apply only to the wholesaling or retailing of bunker fuel. In 1987 the legislature enacted the multiple activities tax credit in RCW 82.04.440. Enactment of the multiple activities tax credit resulted in changed tax liability for certain taxpayers. In particular, some taxpayers that engaged in activities that had been exempt under the prior multiple activities exemption became subject to tax on manufacturing activities upon enactment of the multiple activities tax credit in its place. The manufacturing of bunker fuel is one such activity." [ 2009 c 494 s 1.]
Administration—2009 c 494: "The department of revenue must take any actions that are necessary to ensure that its rules and other interpretive statements are consistent with this act." [ 2009 c 494 s 3.]
Application—2009 c 494: "This act applies both prospectively and retroactively." [ 2009 c 494 s 4.]
Effective date—2009 c 494: "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 [May 14, 2009]." [ 2009 c 494 s 6.]
Severability—Effective date—1985 c 471: See notes following RCW 82.04.260.

catchline: Deductions—Sales of fuel for consumption outside United States' waters by vessels in foreign commerce.


title: RCW 82.04.4331

text:
In computing tax, insurers as defined by RCW 48.01.050, may deduct from the measure of tax amounts paid out for claims incurred before July 1, 1990, for covered health services under medical and dental coverage purchased under chapter 41.05 RCW.
[ 1988 c 107 s 33.]
Notes:
Implementation—Effective dates—1988 c 107: See RCW 41.05.901.

catchline: Deductions—Insurance claims for state health care coverage.


title: RCW 82.04.4332

text:
An approved branch campus of a foreign degree-granting institution in compliance with chapter 28B.90 RCW is considered an educational institution for the purpose of the deduction of tuition fees provided by RCW 82.04.170 in those instances where it is recognized as an organization exempt from income taxes pursuant to 26 U.S.C. Sec. 501(c).
[ 1993 c 181 s 10.]

catchline: Deductions—Tuition fees of foreign degree-granting institutions.


title: RCW 82.04.4337

text:
(1) An assisted living facility licensed under chapter 18.20 RCW may deduct from the measure of tax amounts received as compensation for providing adult residential care, enhanced adult residential care, or assisted living services under contract with the department of social and health services authorized by chapter 74.39A RCW to residents who are medicaid recipients.
(2) For purposes of this section, "adult residential care," "enhanced adult residential care," and "assisted living services" have the same meaning as in RCW 74.39A.009.
[ 2012 c 10 s 72; 2004 c 174 s 7.]
Notes:
Application—2012 c 10: See note following RCW 18.20.010.
Effective date—2004 c 174: See note following RCW 82.04.2908.

catchline: Deductions—Certain amounts received by assisted living facilities.


title: RCW 82.04.4339

text:
(1) In computing tax there may be deducted from the measure of tax amounts received by a nonprofit organization from the United States or any instrumentality thereof, the state of Washington or any municipal corporation or political subdivision thereof, or an Indian tribe as defined in RCW 43.06.523, as salmon recovery grants.
(2) For the purposes of this section, the following definitions apply:
(a) "Nonprofit organization" has the same meaning as in RCW 82.04.3651.
(b) "Salmon recovery grant" means, solely for the purposes of this section, financial assistance provided to primarily benefit the public as a whole by renewing, restoring, or protecting, by human intervention, salmon ecosystems or salmon habitats in this state, whether or not such financial assistance furthers the regulatory activities of the grantor.
[ 2021 c 143 s 1; 2004 c 241 s 1.]
Notes:
Automatic expiration date and tax preference performance statement exemption—2021 c 143: "The provisions of RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2021 c 143 s 6.]
Effective date—2021 c 143: "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 [April 26, 2021]." [ 2021 c 143 s 7.]
Effective date—2004 c 241: "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 31, 2004]." [ 2004 c 241 s 2.]

catchline: Deductions—Salmon recovery grants.


title: RCW 82.04.43391

text:
(1) In computing tax there may be deducted from the measure of tax interest and fees on loans secured by commercial aircraft primarily used to provide routine air service and owned by:
(a) An air carrier, as defined in RCW 82.42.010, which is primarily engaged in the business of providing passenger air service;
(b) An affiliate of such air carrier; or
(c) A parent entity for which such air carrier is an affiliate.
(2) The deduction authorized under this section is not available to any person who is physically present in this state as determined under RCW 82.04.067.
(3) For purposes of this section, the following definitions apply:
(a) "Affiliate" means a person is "affiliated," as defined in RCW 82.04.645, with another person; and
(b) "Commercial aircraft" means a commercial airplane as defined in RCW 82.32.550.
[ 2019 c 8 s 703; 2017 c 323 s 503; 2010 1st sp.s. c 23 s 112.]
Notes:
Effective date—2019 c 8 ss 102, 103, 107, and 701-703: See note following RCW 82.04.067.
Existing rights and liability—Retroactive application—2019 c 8: See notes following RCW 82.02.250.
Tax preference performance statement exemption—Automatic expiration date exemption—2017 c 323: See note following RCW 82.04.040.
Contingency—Application—2010 1st sp.s. c 23 ss 102-112: See notes following RCW 82.04.067.
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.

catchline: Deductions—Commercial aircraft loan interest and fees.


title: RCW 82.04.43392

text:
(1) A qualified dispute resolution center may deduct from the measure of tax amounts received as a contribution from federal, state, or local governments and nonprofit organizations for providing dispute resolution services.
(2) A nonprofit organization may deduct from the measure of tax amounts received from federal, state, or local governments for distribution to a qualified dispute resolution center.
(3) A qualified dispute resolution center must:
(a) Be established under chapter 7.75 RCW; and
(b) Provide services either without charge to the participants or for a fee that is based on the participant's ability to pay, as required by RCW 7.75.030.
(4) As used in this section, a "nonprofit organization" has the same meaning as in RCW 82.04.3651(2).
[ 2012 c 249 s 1.]

catchline: Deductions—Qualified dispute resolution centers.