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WAC 13601 Manufacturers and processors for hire--Sales and use tax exemption for machinery and equipment.
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
WAC: 458-20-13601   5/17/00 Manufacturers and processors for hire.Effective 6/17/00.
RCW: 82.08.02565   1998 Exemptions--Sales of manufacturing and research and development machinery and equipment--Labor and services for installation--Exemption certificate--Rules.
  82.12.02565   1998 Exemptions--Use of manufacturing and research and development machinery and equipment--Exemption certificate prescribed by department--Annual summary.
ETA: 3117.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption
  3118.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Rental of tangible personal property and providing tangible personal property along with an operator
  3119.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Pollution control equipment
  3120.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Electrical apparatus and utility systems
  3121.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption - Devices
  3122.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Design and product development
  3123.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Manufacturing site
  3124.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Buildings, fixtures, and support facilities
  3125.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption - Computers
  3126.2009 2/2/09 Manufacturers’ Machinery and Equipment Exemption – Prototypes
  3127.2009 2/2/09 Manufacturers' Machinery and Equipment Exemption--Research and Development
  2012.08.12.13601 3/31/03 Manufacturer's Machinery and Equipment Exemption Revised 2/2/09 See ETA 3117.2009
  2012.08.12.13601 11/8/06 Manufacturers' Machinery and Equipment Exemption (First Revision) Revised 2/2/09 See ETA 3117.2009
  2012.08.12.13601 3/28/08 Manufacturers' Machinery and Equipment Exemption (Second Revision) The Department has amended the ETA 2012 series to add the following language explaining that even if equipment is eligible for exemption under the guidelines of the particular document, all requirements for exemption must be satisfied.  There is no change to the subject matter of these documents.   Therefore, readers are advised that RCW 82.08.02565, RCW 82.12.02565, and WAC 458-20-13601 should also be referenced when making determinations about taxability. Revised 2/2/09 See ETA 3117.2009
  2012-1S.08.12.13601 3/31/03 Rental of Tangible Personal Property and Rental of Equipment with an Operator.  Revised, effective 1/27/05. The phrase  "rental of equipment with operator" has been replaced with "providing tangible personal property along with an operator" to recognize legislation that adopted provisions and terminology of the Streamlined Sales and Use Tax Agreement. Revised 2/2/09 See ETA 3118.2009
  2012-1S.08.12.13601 3/28/08 Rental of Tangible Personal Property and Rental of Equipment with an Operator. 2nd revision Revised 2/2/09 See ETA 3118.2009
  2012-2S.08.12.13601 3/31/03 Pollution Control Equipment Revised 2/2/09 See ETA 3119.2009
  2012-2S.08.12.13601 3/28/08 Pollution Control Equipment 1st revision Revised 2/2/09 See ETA 3119.2009
  2012-3S.08.12.13601 3/31/03 Electrical Apparatus and Utility Systems Revised 2/2/09 See ETA 3120.2009
  2012-3S.08.12.13601 3/28/08 Electrical Apparatus and Utility Systems 1st revision Revised 2/2/09 See ETA 3120.2009
  2012-4S.08.12.13601 3/31/03 Devices  -  Revised, effective 1/27/05. The term and definition of "software" have been replaced with the term and definition of "computer software" to recognize legislation that adopted provisions of the Streamlined Sales and Use Tax Agreement. Revised 2/2/09 See ETA 3121.2009
  2012-4S.08.12.13601 3/28/08 Devices  2nd revision Revised 2/2/09 See ETA 3121.2009
  2012-5S.08.12.13601 3/31/03 Design and Product Development  -  Revised, effective 1/27/05. Revised to recognize Chapter 8, Laws of 2004, which provides an exemption for computer equipment used by a printer or publisher; and Chapter 1, Laws of 2003 2nd sp.s., which provides an exemption for computer equipment used in development, design and engineering activities by the commercial aerospace manufacturing industry. Revised 2/2/09 See ETA 3122.2009
  2012-5S.08.12.13601 3/28/08 Design and Product Development   2nd revision Revised 2/2/09 See ETA 3122.2009
  2012-6S.08.12.13601 3/31/03 Manufacturing Site Revised 2/2/09 See ETA 3123.2009
  2012-6S.08.12.13601 3/28/08 Manufacturing Site 1st revision Revised 2/2/09 See ETA 3123.2009
  2012-7S.08.12.13601 3/31/03 Buildings, Fixtures, and Support Facilities Revised 2/2/09 See ETA 3124.2009
  2012-7S.08.12.13601 3/28/08 Buildings, Fixtures, and Support Facilities 1st revision Revised 2/2/09 See ETA 3124.2009
  2012-8S.08.12.13601 3/31/03 Computers  -  Revised, effective 1/27/05. Revised to recognize Chapter 8, Laws of 2004, which provides an exemption for computer equipment used by a printer or publisher; and Chapter 1, laws of 2003 2nd sp.s., which provides an exemption for computer equipment used in development, design and engineering activities by the commercial aerospace manufacturing industry. Revised 2/2/09 See ETA 3125.2009
  2012-8S.08.12.13601 3/28/08 Computers 2nd revision Revised 2/2/09 See ETA 3125.2009
  2012-9S.08.12.13601 3/31/03 Prototypes Revised 2/2/09 See ETA 3126.2009
  2012-9S.08.12.13601 3/28/08 Prototypes 1st revision Revised 2/2/09 See ETA 3126.2009
  2012-10S.08.12.13601 11/8/06 Manufacturers' Machinery and Equipment Exemption--Research and Development Revised 2/2/09 See ETA 3127.2009
  2012-10S.08.12.13601 3/28/08 Manufacturers' Machinery and Equipment Exemption--Research and Development 1st revision Revised 2/2/09 See ETA 3127.2009
INDUSTRY GUIDES:     Manufacturing Industries
      1/1/09 Wine Industry
SPECIAL NOTICES:      
Subject Title Reference:      
Incentives 06/07/2011 Sales and Use Tax Exemption for Qualifying Manufacturing Machinery and Equipment Clarified
Manufacturing  06/07/2011 Sales and Use Tax Exemption for Qualifying Manufacturing Machinery and Equipment Clarified
Aerospace 05/05/2010 FAR Part 145 Preferential B&O Tax Rate Extended
Economic Nexus 05/28/2010 New "Economic Nexus" in Washington State May Impact "Foreign Corporations"
Economic Nexus 05/28/2010 New Apportionment Method
Economic Nexus 05/28/2010 Tax Attorneys and CPAs New "Economic Nexus" in Washington State May Impact Your Clients
Economic Nexus 05/28/2010 Registered Out-of-state Businesses Currently not Reporting Income from Service Activities - New Apportionment for Certain Income
Investment Casting 06/15/2010 Sales Tax Exemptions for Investment Casting Process
Economic Nexus 09/10/2010 B&O Tax Reporting Requirement Continues After Business Activity Stops (Trailing Nexus)
      06/30/1998 Changes of the Manufacturing and Equipment Sales and Use Tax Exemption and Reporting Requirements
      07/01/1999 Manufacturing M&E exemption Refund for Logging & Aggregate Businesses 6/28/99
      11/08/1999 "New Buyers" Retail Sales Tax Exemption Certificate
Explosives     4/26/2002 Taxability of Sales of Explosives
Aerospace/ Incentives     01/15/2004 Aerospace Industry Manufacturer Tax Incentives
Aerospace/ Incentives     03/22/2004 Aerospace Industry Sales & Use Tax Exemption for Computer Hardware, Software & Peripherals
Aircraft Prototype     07/16/2004 Aircraft Prototype Exemption
Incentives/ Manufacturing/ Semiconductor Materials     12/21/2006 Semiconductor Materials Manufacturers Tax Incentives (SHB 3190 Chapter 84, Laws of 2006)
Aerospace     06/13/2008 Tax Incentives for Federal Aviation Regulation Part 145 Repair Stations
Aerospace     06/13/2008 Aerospace Manufacturers Tax Incentives
Aerospace     06/13/2008 Aerospace Tooling Manufacturers Tax Incentives
Energy Efficient Commercial Equipment     06/24/2008 Energy Efficient Commercial Equipment - Sales Tax Incentive for Purchases
Polysilicon Manufacturers     06/26/2008 Polysilicon Manufacturers Tax Incentives
DIRECTIVE: None      
RPM: None      
WTD: 16 WTD 99 96-162   MANUFACTURING EQUIPMENT AND MACHINERY EXEMPTION - - LOGGING.Because logging is an extractive activity, not a manufacturing activity, equipment purchases to be used in logging operations are not eligible for exemption.
  17 WTD 424 98-098   MACHINERY AND EQUIPMENT - EXEMPTION - SALES CONTRACTS - SALES PRIOR TO EFFECTIVE DATE OF EXEMPTION.A taxpayer need not collect and remit retail sales tax to the Department of Revenue, on amounts received for sales of machinery or equipment that otherwise qualify as exempt under RCW 82.08.02565, when the unconditional sales contract was entered into prior to the effective date of that statute and the amounts were received prior to the effective date of that statute, if the machinery or equipment was delivered after the effective date of RCW 82.08.02565.
  19 WTD 289 99-225R   MANUFACTURING EQUIPMENT AND MACHINERY EXEMPTION - PRINTING.Blank printing plates, purchased for use in an intermediate step in the printing process, are exempt from retail sales/use tax as machinery and equipment used directly in a manufacturing if they meet the one-year useful life requirement.Blank printing plates purchased for a one-time use are not exempt.Other supplies including film, tape, and developer, are not exempt from retail sales/use tax as machinery and equipment.
  19 WTD 377 99-310   SALES TAX -- MANUFACTURING MACHINERY AND EQUIPMENT (M&E) EXEMPTION -- SEWAGE SLUDGE -- COMPOST --MANUFACTURING OPERATION.A municipality that produces compost, for sale, from sewage sludge at its wastewater treatment plant, has a manufacturing operation.For purposes of the manufacturing machinery and equipment (M&E) exemption, the manufacturing operation begins where the sludge is identified and handled as a raw material of the compost.
  19 WTD 377 99-310   SALES TAX -- MANUFACTURING MACHINERY AND EQUIPMENT (M&E) EXEMPTION --MAJORITY USE --Potentially eligible machinery and equipment qualifies for the manufacturing machinery and equipment (M&E) exemption only if the majority of the use is in the manufacturing operation.
  19 WTD 502 99-306   SALES TAX -- MANUFACTURING MACHINERY AND EQUIPMENT EXEMPTION -- PRINTING PLATES -- OCCASIONAL USE -- USEFUL LIFE.Eligibility for the manufacturing machinery and equipment (M&E) exemption from the retail sales tax is not limited to machinery and equipment that is purchased for use on a regular and recurring basis.Nor is eligibility limited to machinery and equipment that would last a year or more if used on a regular and recurring basis.Machinery and equipment that is purchased for occasional use with the reasonable expectation that it will still be useful for the purpose purchased a year or more after purchase, may qualify for the exemption.
  19 WTD 515 99-325   MANUFACTURING EQUIPMENT AND MACHINERY EXEMPTION - EXTRACTING.Machinery and equipment used for the crushing, and/or blending of rock, sand, stone, gravel, or ore is machinery and equipment used in a manufacturing operation.See RCW 82.04.100.Machinery and equipment used in a manufacturing operation is exempt from retail sales tax if it meets the "used directly" and "majority use" requirements.
  19 WTD 582 99-288   RETAIL SALES TAX -- MANUFACTURING EQUIPMENT AND MACHINERY (M&E) EXEMPTION --EXTRACTING -- MANUFACTURING OPERATION -- WHERE MANUFACTURING OPERATION BEGINS.The use of a loader at a manufacturing site by a producer and seller of ready-mix concrete and sand and gravel products, limited to moving previously quarried but unprocessed materials from stockpiles to the sorting and washing area, is not use in a manufacturing operation.Only those activities that take place after the first screen are considered part of the manufacturing operation.
  19 WTD582 99-288   RETAIL SALES TAX -- MANUFACTURING EQUIPMENT AND MACHINERY (M&E) EXEMPTION --MAJORITY USE REQUIREMENT.The Department considers machinery and equipment to qualify for the M&E exemption only if the majority of the use, as measured by percentage of time, percentage of revenue, volume of products derived, or other reasonable measure, is in a manufacturing operation.
  19 WTD 594 99-296   RETAIL SALES TAX - MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION -USED DIRECTLY IN A MANUFACTURING OPERATION - EXEMPT AND NON-EXEMPT USES.The purchase of a crane is exempt from retail sales tax as manufacturing machinery or equipment under RCW 82.08.02565, even though it is used both on the manufacturing site and off-site, if the majority of its use is on-site.
  19 WTD 804 99-183   USE TAX DEFERRAL - QUALIFYING ACTIVITIES.Mining and transportation activities do not qualify as manufacturing activities.Rock crushing and smelting activities qualify as a manufacturing activity.
  19 WTD 876 99-337   MACHINERY AND EQUIPMENT (M & E) EXEMPTION - COMMUNICATIONS EQUIPMENT.The exemption from the retail sales and use taxes for machinery and equipment used by manufacturers is not available if the sole use of the equipment is to communicate with employees.
  19 WTD 876 99-337   MACHINERY AND EQUIPMENT (M & E) EXEMPTION - DUAL USE.When a taxpayer purchases machinery or equipment that is used in both a qualifying and non-qualifying use, then the Department will use a majority use test to determine if the equipment qualifies for the machinery and equipment exemption from the retail sales or use tax.
  19 WTD 876 99-337   MACHINERY AND EQUIPMENT (M & E) EXEMPTION - TANGIBLE PERSONAL PROPERTY.Machinery and equipment must be used to manufacture tangible personal property to qualify for the machinery and equipment exemption.If a taxpayer purchases machinery or equipment that is used to produce items that will be affixed to the real property where it is produced, then the taxpayer is not manufacturing tangible personal property.Therefore, the machinery and equipment exemption does not apply to that equipment.
  19 WTD 885 99-339   MACHINERY AND EQUIPMENT (M & E) EXEMPTION - TANGIBLE PERSONAL PROPERTY.Machinery and equipment must be used to manufacture tangible personal property to qualify for the machinery and equipment exemption.If a taxpayer purchases machinery or equipment that is used to produce items that will be affixed to the real property where they are produced, then the taxpayer is not manufacturing tangible personal property.Therefore, the machinery and equipment exemption does not apply to that equipment.
  19 WTD 885 99-339   MACHINERY AND EQUIPMENT (M & E) EXEMPTION - MANUFACTURING OPERATION.The exemption from the retail sales and use taxes applies to machinery and equipment used in a manufacturing operation.A manufacturing operation is a place or manufacturing plant and does not include delivery of manufactured products.
  19 WTD 885 99-339   MACHINERY AND EQUIPMENT (M & E) EXEMPTION - DUAL USE.When a taxpayer purchases machinery or equipment that is used in both a qualifying and non-qualifying use, then the Department will use a majority use test to determine if the equipment qualifies for the machinery and equipment exemption from the retail sales or use tax.
  19 WTD 941 00-026   SALES TAX - USE TAX - MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION - MAJORITY USE - BAKERY.To qualify for the M&E exemption, the majority use of equipment must be in the manufacturing operation.Use of equipment outside the manufacturing site to deliver products does not qualify as use in the manufacturing operation.
  19 WTD 941 00-026   SALES TAX - USE TAX - MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION - FIRST USE - BAKERY.Under the majority use test, provided the taxpayer initially uses equipment in an activity where the majority of its use is an exempt use, the equipment qualifies for the M&E exemption.The fact that an item may have first been used in a minority, nonexempt use that is related to the manufacturing process does not disqualify that item from exemption.
  20 WTD 67 00-103   MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION - USE DIRECTLY IN A MANUFACTURING OPERATION - LAPTOP COMPUTERS.To qualify for the M&E exemptions:, laptop computers must 1) direct or control machinery or equipment that acts upon or interacts with tangible personal property; or, 2) act upon or interact with an item of tangible personal property. Use of laptop computers that are essential to test the functioning of the machinery being manufactured qualify for the exemption.The verification of proper connections and internal communication, calibration, and testing of the assembled unit performed by the computers is an action that is part of the final stages of the manufacturing operation.This collection of information and verification process is accomplished through the interaction of the laptop computers with the cutting machine's internal computer programs.As such, the laptop computers are "used directly" in a manufacturing operation as they interact with an item of tangible personal property.
  20 WTD 75 00-104   MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION - USE DIRECTLY IN A MANUFACTURING OPERATION - COMPUTER OR DIGITAL EQUIPMENT.To qualify for the M&E exemptions:, computer and digital equipment must 1) direct or control machinery or equipment that acts upon or interacts with tangible personal property; or, 2) act upon or interact with an item of tangible personal property.The purpose of the AutoCAD and digital equipment at issue was to produce the necessary specifications and schematics to enable the shop machinery to be programmed to make the necessary cuts and alterations to the raw materials to produce the finished cabinets and to generate schematics.Such equipment does not directly control equipment, or interact with an item of tangible personal property which is part of the manufacturing process and does not qualify as directly controlling machinery being used in the manufacturing process.
  20 WTD 167 00-138   MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") - EXEMPTIONS - WHERE MACHINERY AND EQUIPMENT ARE USED.Neither RCW 82.08.02565 nor 82.12.02565 requires that manufacturing machinery or equipment actually be used in Washington.
  20 WTD 167 00-138   MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") - EXEMPTIONS - WHO IS A MANUFACTURER - PARTICULAR LOGGING OPERATIONS.A "manufacturer" includes a person who cuts, delimbs, or measures felled, cut, or taken trees.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION. RCW 82.08.02565, the manufacturing machinery and equipment ("M&E") exemption, intends an exemption for specific classes of property and is to be . . . construed in favor of taxation. However, the policy of strict construction of exemption provisions does not mean they will be read so narrowly that the legislative purpose and intent in enacting the provisions are undermined.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- SUPPORT FACILITY. While the words "support" and "facility" each have a variety of meanings, in RCW 82.08.02565(2)(a) and WAC 458-20-13601(3)(m) they reference appurtenances to industrial fixtures or devices, specially designed or suited, and necessary, for holding the fixture or device in position.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- SUPPORT FACILITY -- "CONTAIN" AN INDUSTRIAL FIXTURE OR DEVICE. Merely providing a room or other enclosure that houses machinery or equipment is not sufficient to qualify the enclosure or its components as "support facilities" for purposes of the M&E exemption.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- INDUSTRIAL FIXTURE -- INTERIOR ENCLOSURES. Interior enclosures that . . . primarily perform wall/ceiling functions, generally are not "industrial fixtures" for purposes of the M&E exemption.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- USED DIRECTLY -- INSULATED WALL PANELS. Insulated wall panels that make a building's refrigeration system more efficient and help keep out airborne contaminants, but that are entirely passive structures, do not "control or regulate" tangible personal property for purposes of the "used directly" requirement of the M&E exemption. Nor do they "act upon or interact" with an item of tangible personal property for purposes of the requirement.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- USED DIRECTLY -- REFRIGERATION EQUIPMENT. Equipment that emits refrigerated air to maintain frozen food in a frozen state "acts upon or interacts with" the frozen food for purposes of the "used directly" requirement of the M&E exemption.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- ELECTRICAL UTILITY SYSTEM. RCW 82.08.02565(2)(b)(iv)'s exclusion of electrical utility systems from the definition of "machinery and equipment" for purposes of the M&E exemption, excludes a manufacturing building's electrical utility system, not some theoretical bare warehouse's electrical system.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- USED DIRECTLY -- ELECTRICAL SYSTEM. The provision in RCW 82.08.02565(3) stating that machinery and equipment is "used directly" in a manufacturing operation if it produces power for machinery and equipment does not encompass transformers and other electrical devices that regulate, switch, or transport the current.
  20 WTD 214 01-007   SALES TAX -- M&E EXEMPTION -- USED DIRECTLY -- ELECTRICAL SYSTEM. Electrical substation equipment that controls the voltage of electricity flowing in the building's electrical system, and therefore reaching machinery and equipment, does not thereby "control and regulate" the machinery and equipment for purposes of the "used directly" requirement of the M&E exemption.
  20 WTD 272 00-187   RETAIL SALES TAX - M&E TAX EXEMPTION - CONDITIONING OF SEED.An agricultural business is not entitled to a refund of sales tax it paid for the purchase, installation, and repair of machinery and equipment it uses to condition seed for planting because conditioning of seed for use in planting is not a manufacturing activity.
  20 WTD 367 00-148   SALES TAX -- M&E EXEMPTION -- CHAINSAWS -- TREE THINNING -- MANUFACTURING -- MANUFACTURING OPERATION.Sales of chainsaws to a taxpayer who performs only tree thinning and slashing in standing forests are not eligible for the manufacturing machinery and equipment exemption from retail sales tax.Where the use is not in cutting, delimbing, or measuring of felled, cut, or taken trees, and the taxpayer is not manufacturing articles for sale, the taxpayer is not a "manufacturer," nor is the use in a "manufacturing operation," for purposes of the exemption.
  20 WTD 494 99-256   RCW 82.08.02565: SALES TAX - M&E EXEMPTION.An [engine] remanufacturer, which produces [engines] for sale, has a manufacturing operation with respect to the manufacturing machinery and equipment exemption.
  20 WTD 494 99-256   RCW 82.08.02565: SALES TAX - M&E EXEMPTION.In order for an item of machinery and equipment to qualify for the machinery and equipment exemption, the majority of use of the item must be in a manufacturing operation.
  21 WTD 251 01-102   RCW 82.08.02565:RETAIL SALES TAX--M&E EXEMPTION - CONCRETE MIXER TRUCKS - LEASES.Lessees of concrete mixer trucks must provide taxpayer/lessor with exemption certificates as prescribed in RCW 82.08.02565(1) and Rule 13601(4)(a) in order for the taxpayer not to collect tax on the leases.
  22 WTD 90 02-0142   SALES AND USE TAX - M&E EXEMPTION - SOFTWARE USED IN A MANUFACTURING PROCESS.Taxpayer's software used to transfer design drawings into joinery machinery cutting settings qualifies for the M&E exemption.
  22 WTD 223 03-0078   RETAIL SALES TAX -- USE TAX - DEFERRAL - MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION -- MANUFACTURING - DEFINITION - CONTROLLED ATMOSPHERE STORAGE FACILITY."Manufacturing," for purposes of the deferral and M&E exemption, is defined in RCW 82.04.120.The operation of a controlled atmosphere storage facility is expressly excluded from the definition of manufacturing.Accordingly, the taxpayer qualifies for neither the M&E exemption nor the tax deferral.
  22 WTD 223 03-0078   RETAIL SALES TAX -- USE TAX - DEFERRAL - APPLICATION - FAILURE TO TIMELY FILE - CONFUSING INFORMATION - LEGISLATIVE INTENT.Even if the taxpayer's activity qualified as manufacturing, the taxpayer would not qualify for the deferral because it failed to timely file its application.The taxpayer's failure to timely file is not excused by confusing information it may have received.We are unable to disregard the specific statutory requirements to allow the deferral based on legislative intent.
  22 WTD 223 03-0078   RETAIL SALES TAX -- USE TAX - MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION -- CONTROLLED ATMOSPHERE STORAGE FACILITY -- BUILDINGS.Even if the taxpayer's activity qualified as manufacturing, the taxpayer would not qualify for the exemption because the controlled atmosphere storage facility is a building.
  23 WTD 1 01-130R   RETAIL SALES TAX - MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION - MANUFACTURING OPERATION - MANUFACTURING SITE -- PEA COMBINE - MANUFACTURING VERSUS HARVESTING.Where pea combines are used in farmers' fields to strip pea pods from vines and to de-pod peas, the pea combines are used in a harvesting activity, not a manufacturing activity.Although harvesting activities may change the form of products and enhance their value, this does not convert a harvesting activity to a manufacturing activity.Accordingly, the farmers' fields do not qualify as manufacturing sites, and the combines are not used in a manufacturing operation and do not qualify for the M&E exemption.
  23 WTD 177 03-0261   B&O TAX -- EXEMPTION -- M&E -- REPLACEMENT PARTS -- USEFUL LIFE OF LESS THAN ONE YEAR -- RE-TIPPING OF SAW BLADES.The replacement of diamond tips on saw blade cores, when those tips had a useful life of only 4-6 weeks, are not exempt M&E, even though the tips are expensive and necessary to Taxpayer's operation.
  23 WTD 190 03-0310   RETAIL SALES TAX -- M&E -- BAR CODING SCANNER -- SOFTWARE.A manufacturer's purchase of a bar coding scanner system to track and locate inventory (raw materials - finished goods) through its manufacturing process did not qualify for the M&E exemption because it was not used directly in the manufacturing process.
  23 WTD 364 04-0143   RETAIL SALES TAX - MANUFACTURING MACHINERY AND EQUIPMENT EXEMPTION; TESTING EQUIPMENT.Testing equipment was not used directly within a manufacturing operation where the testing occurred after the goods were manufactured and related only to the shipment and sale of the goods after manufacture.
  23 WTD 364 04-0143   RETAIL SALES TAX - MANUFACTURING MACHINERY AND EQUIPMENT EXEMPTION; TESTING OPERATION.A "testing operation" is defined as the testing of tangible personal property for a manufacturer or processor for hire.A manufacturer's offsite testing facility was not a "testing operation" because it did not perform third party testing for manufacturers.
  24 WTD 16 03-0316   RETAIL SALES TAX -- EXEMPTION - MACHINERY AND EQUIPMENT -- ENERGY GENERATION.A public utility district's purchases of machinery and equipment incorporated into an interconnection facility were not exempt from retail sales tax under RCW 82.08.02567 where the interconnection facility was owned and operated by the PUD.
  24 WTD 92 04-0097   MANUFACTURING MACHINERY AND EQUIPMENT (M&E) EXEMPTION - LOGGING OPERATIONS.Taxpayer that handled logs at a sawmill operated by a third-party manufacturer was subject to Service B&O tax, not Processing for Hire, and therefore not entitled to the M&E exemption.Taxpayer did some minimal processing of logs, but the predominant activities consisted of storing and handling.
  24 WTD 92 04-0097   MANUFACTURING MACHINERY AND EQUIPMENT (M&E) EXEMPTION - LOGGING OPERATIONS.Taxpayer that handled logs belonging to others at Taxpayer's log-sorting yard was subject to Service B&O tax, not Processing for Hire, and therefore not entitled to the M&E exemption.Taxpayer did some minimal processing of logs, but the predominant activities consisted of unloading logs, sorting them by species and length, and sending them to destinations selected by the log owner.
  24 WTD 124 02-0124   RETAIL SALES TAX - M&E EXEMPTION - CONSTRUCTION FOR LESSOR.To be potentially eligible for the manufacturing machinery and equipment (M&E) exemption, a sale must be to a manufacturer or processor for hire.Sales of building materials and construction services to a property owner who intends to lease the structure to a manufacturer after construction is complete do not qualify for the M&E exemption.
  24 WTD 176 03-0321   RETAIL SALES TAX -- M&E EXEMPTION -- WATER SYSTEM -- A water system used throughout a food manufacturing process qualifies for the M&E exemption to the extent the water is used in the process (as opposed to the volume used to clean the building, equipment, or for other nonmanufacturing purposes).
  24 WTD 317 04-0130   SALES AND USE TAX - M&E EXEMPTION - ROCK CRUSHING EQUIPMENT.An earth-moving contractor's purchase of rock crushing equipment does not qualify for the M&E sales and use tax exemption when the equipment is used to crush rock that is not sold.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- MAJORITY USE -- FRUIT FLATS.Fruit flats used a majority of the time in a manufacturing operation may qualify for the M&E sales tax exemption.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- FLOOR.A mezzanine floor upon which machinery and equipment is placed, does not qualify for the M&E exemption.A structure or improvement that functions as a floor, wall, door, roof, or other building component does not qualify for the exemption.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- BUILDING FIXTURES -- FANS.Fans used directly in the manufacturing operation may qualify for the M&E sales tax exemption.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- PLASTIC BUG STRIP CURTAINS.Plastic bug strip curtains hung from the ceiling at a manufacturing facility do not qualify for the M&E sales tax exemption because they are not used directly in the manufacturing operation.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- LOADING DOCK DOOR SEALS -- ADJUSTABLE RAMPS.Metal adjustable loading ramps, distinct from the factory floor, qualify for the M&E sales tax exemption.Door seals affixed to the building do not qualify because they are not used directly in the manufacturing operation.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- COMPUTER SOFTWARE: ETA 2012-8S provides the Department's position regarding the applicability of the M&E sales tax exemption to computer software purchases.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- HOLDING TANKS.Waste water holding tanks may qualify for the M&E sales tax exemption as pollution control equipment.The tanks must be used to capture wastes and contain or prevent releases resulting from processes of the operation.A waste water tank plumbed into the building's general waste water, which serves a building purpose, as opposed to a manufacturing purpose, does not qualify for the M&E exemption.Ammonia tanks, which store or temporarily hold an item of tangible personal property integral to the taxpayer's freezing process, meet the directly used test under RCW 82.08.02565(2)(c)(ii).
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- ELECTRICAL SYSTEMS:To the extent building electrical fixtures are integral to the manufacturing process, they qualify for the M&E exemption.However, to the extent they serve a building purpose, as opposed to a manufacturing purpose, electrical fixtures do not qualify.
  24 WTD 351 03-0325   RETAIL SALES TAX -- M&E EXEMPTION -- BUILDING CONSTRUCTION -- DOCUMENTATION.An engineering study, design, or plan, confirming that the reinforced portion of the wall or floor was designed and constructed to support the machinery and equipment, and that it did in fact separately and differently support the machinery and equipment, would be documentation for qualification.In determining what qualifies for exemption, the portion of the construction that would be there regardless of the support facility does not qualify.Only the additional construction qualifies for the M&E sales tax exemption.
  25 WTD 127 05-0151   SALES TAX - EXEMPTION - MANUFACTURINGMACHINERY AND EQUIPMENT (M&E) - WEIGH/PRICE MACHINES - PALLET JACKS.Weigh/price equipment (and related replacement parts) and pallet/skid jacks are "used directly" in the taxpayer's manufacturing operation and qualify for exemption from retail sales tax under RCW 82.08.02565 to the extent they measure and transport, respectively, the taxpayer's manufactured products.
  25 WTD 143 05-0193   RETAIL SALES TAX -- M&E EXEMPTION -- PAVING.Paving work that is directly connected to installing a propane line that qualifies for the M&E exemption, qualifies as a service rendered in respect to installing qualifying M&E and is therefore eligible for deduction.
  25 WTD 143 05-0193   RETAIL SALES TAX -- M&E EXEMPTION -- LOADING RAMP.A portable loading ramp that provides physical support for or access to tangible personal property when used directly in a manufacturing operation is eligible for deduction.
  26 WTD 136 05-0176   RULE 13601; RCW 82.08.02565:RETAIL SALES TAX - M&E EXEMPTION - TESTING OPERATION - SCALING LOGS - DRYING WOOD CHIPS.The scaling of logs is not a testing operation for M&E exemption purposes because it is the mere measuring of board feet that does not determine the properties, qualities, and limitations of the logs.For the same reason, the sampling of moisture content in wood chips is not a testing activity for M&E exemption purposes because it simply assists in determining the quantity of wood chips being bought and sold.Therefore, machinery and equipment used in scaling logs and drying wood chips do not qualify for the M&E exemption.
  26 WTD 136 05-0176   RULE 13601; RCW 82.08.02565:RETAIL SALES TAX - M&E EXEMPTION - TESTING OPERATION - CHIP CLASSIFIERS.Wood chip classifiers used in testing operations at testing sites qualify for the M&E exemption because they help determine the properties, qualities, and limitations of the wood chips that are eventually bought and sold.
  27 WTD 119 07-0324E   RCW 82.08.02565; WAC 458-20-13601:EXEMPTIONS - SALES OF MACHINERY AND EQUIPMENT FOR MANUFACTURING, RESEARCH AND DEVELOPMENT - LABOR AND SERVICES FOR INSTALLATION - WATER TREATMENTA water distribution business is not a "manufacturer," and treatment of raw water by the water distribution business is not a "manufacturing operation" for purposes of the M&E exemption provided for in RCW 82.08.02565(1).
  29 WTD 65 10-0017 09/30/2010 RULE 13601; RCW 82.08.02565:  EXEMPTIONS --  SALES OF MACHINERY AND EQUIPMENT -- DEMOLITION AND EXCAVATION COSTS.  A demolition and excavation contract for the removal of a facility foundation, after obsolete equipment is removed and before new equipment is installed, is not a contract for services “rendered in respect to installing” “qualifying machinery and equipment” for purposes of the M&E exemption provided for in RCW 82.08.02565.
  30 WTD 10 10-0209 03/30/11 RULE 13601;  RCW 82.08.02565:  RETAIL SALES TAX -- M&E EXEMPTION -- EQUIPMENT -- INSTALLED COMPONENT -- FIRE SUPPRESSION SYSTEM.    A fire suppression system that was interconnected with and installed into an M&E qualified paint booth was also exempt from retail sales tax under RCW 82.08.02565.   
  31 WTD 1 10-0108 05/31/12 RCW 82.08.02565; RCW 82.12.02565; RCW 82.04.120: RETAIL SALES TAX – DEFINITION OF “TO MANUFACTURE” FOR M&E EXEMPTION. The sorting and bundling of recyclable materials is not manufacturing under RCW 82.04.120 because the process does not create a new, different, or useful substance. While the process changes the value of the materials, it does not change their form or properties or meet the other factors of manufacturing.
  31 WTD 67 11-0053 09/27/2012 RCW 82.08.02565; RCW 82.12.02565; RCW 82.04.120: RETAIL SALES TAX – DEFINITION OF “TO MANUFACTURE” FOR M&E EXEMPTION. The crushing of automobile hulks is not manufacturing under RCW 82.04.120 because the process does not create a new, different, or useful substance.
OTHER: