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Q:  What happens if the eight year use requirements are not met for the rural county sales/use tax deferral?

A: 

Deferred taxes must be repaid if an investment project is used for purposes other than qualified manufacturing or research and development during the calendar year for which the department certifies the investment project as operationally complete or at any time during any of the succeeding seven calendar years.

If the taxpayer fails to return a survey, or does not provide adequate information on the report, the department may deem the taxes immediately due.

Taxes are immediately due according to the following schedule: 

Year in which no qualifying use occurs                                             % of deferred taxes due

                          1                                                                                                     100% 
                          2                                                                                                      87.5% 
                         
3                                                                                                      75%
                         
4                                                                                                      62.5%
                         
5                                                                                                      50%
                         
6                                                                                                      37.5% 
                         
7                                                                                                      25%
                         
8                                                                                                      12.5%

 

Interest on the taxes, but not penalties, must be paid retroactively to the date of deferral.

Deferred taxes do not need to be repaid on particular items if the purchase or use of the item would have qualified for the machinery and equipment sales and use tax exemptions provided by RCW 82.08.02565 and 82.12.02565 (discussed in WAC 458-20-13601) at the time of purchase or first use.

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