What is the contract clearance process?
RCW 60.28 mandates that the Department of Revenue certifies that all excise taxes have been paid in full before a public agency releases retainage withheld on public works contracts over $35,000.
When a public works project over $35,000 is completed, the public agency submits a Notice of Completion to the Department of Revenue.
Once the Department receives a Notice of Completion:
- A Reconciliation of Taxes and a copy of the Notice of Completion are sent to the general contractor.
The contractor completes the Reconciliation of Taxes which details how they reported their income from the project and calculates any additional tax or credit due.
- An auditor may be assigned to assist in reviewing the reported project information and completing the reconciliation.
When all excise taxes due on the contract have been paid, a Certificate of Payment is issued by the Department to the public agency with a copy to the contractor. This notifies the public agency that state excise, sales and/or use taxes reported on the project have been paid and the Department is releasing their interest in the retainage.
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