You will owe leasehold excise tax if you lease any facilities, equipment, or other property from a governmental entity. The leasehold excise tax takes the place of the property tax. Businesses leasing property from governmental entities are responsible for paying the leasehold excise tax on the fair market rental value of the property or the actual rent paid. The state, counties, cities, and other Washington public entities are required to collect the tax from you and remit it to the Department of Revenue. If you lease federal property, you are responsible for registering and remitting the tax directly to the Department of Revenue. Please contact the Department at 360-705-6115 for more information on the leasehold excise tax.