What is leasehold excise tax and when does it apply?

The leasehold excise tax applies in lieu of county property tax when persons or businesses lease or occupy publicly-owned real or personal property.

Public property is property owned by the federal government, state of Washington, counties, school districts and other municipal corporations.

The amount subject to tax is generally the amount of rent. Although certain expenses and improvements may also be included in the taxable amount.

Generally, the tax is collected by the public entity that leases the property. However, the federal government does not collect the tax. Therefore, persons leasing federal property must report and pay the tax directly to the Department of Revenue.

Note: For more information regarding leasehold excise tax, contact the Department’s Special Programs section at (360) 570-3265.