B&O tax rate for aerospace businesses

Effective April 1, 2020, Engrossed Senate Bill 6690 repealed the aerospace preferential rates in RCW 82.04.260(11).  Businesses no longer report under the following line codes:

• Manufacturing of Commercial Airplanes, Components, or Aerospace Tooling.
• Wholesaling of Commercial Airplanes, Components, or Aerospace Tooling.
• Retailing of Commercial Airplanes, Components, or Aerospace Tooling.

Aerospace manufacturers of commercial airplanes and components of commercial airplanes

B&O tax rates for manufacturers of commercial airplanes and manufacturers of components for commercial airplanes increased effective April 1, 2020.  If you manufacture commercial airplanes or components for commercial airplanes you should report under the following line codes:

• Manufacturing of Commercial Airplanes or Components (0.484%).
• Wholesaling of Commercial Airplanes or Components (0.484%).
• Retailing of Commercial Airplanes or Components (0.484%).

Aerospace tooling manufacturers

B&O tax rates for manufacturers of tooling increased effective April 1, 2020. If you manufacture tooling specifically designed for use in manufacturing commercial airplanes or components of commercial airplanes, you should report as follows:

• From April 1, 2020 to Dec. 31, 2020, under the standard B&O tax classifications for manufacturing, processing for hire, wholesaling, and retailing.
• Beginning Jan. 1, 2021, under the following classifications:
  • Manufacturing of Commercial Airplane Tooling (0.484%).
  • Wholesaling of Commercial Airplane Tooling (0.484%).
  • Retailing of Commercial Airplane Tooling (0.471%).

Please see our Special Notice: Increased B&O tax rates for certain aerospace tax classifications and ESB 6690 for more information.

Aerospace non-manufacturers

If you are performing aerospace product development for others you should report under the B&O tax classification Non-manufacturing Aerospace Product Development at a preferential rate of 0.9%.

Note: This is an apportionable activity.

The preferential rate expires June 30, 2040.

Federal Aviation Administration (FAR) Part 145 Repair Stations

If you are a certified FAR part 145 repair station you should report under the B&O tax classification Federal Aviation Administration (FAR) Repair Station at a preferential rate of .2904% for retail sales that are exempt from sales tax under RCW 82.08.0261, RCW 82.08.0262, or RCW 82.08.0263.

Note: For all other sales you should report under the standard Wholesaling or Retailing B&O tax classifications and rates.  

The preferential rate expires June 30, 2040.

Reporting/documentation:

The following reporting/documentation requirements apply to the preferential B&O tax rates and other aerospace incentives.

• No application required.
• Annual Tax Performance Report filed by May 31 of the following year.
• Electronic filing required.

For questions or assistance reporting, please contact us at 360-705-6216.