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Leasehold excise tax (LET) may apply when a street obstruction permit or other permit to use public property (use permit) is issued by a public entity, such as a city or county, to a private party. Use permits could be called:
- Public space permit.
- Right of way permit.
- Road use permit.
- Excavation permit.
- Right of way use permit.
Who needs use permits?
A public entity may require a permit for any private use of a public right of way easement. This includes any activity that restricts access, disrupts traffic (including that of vehicles, pedestrians, and bicycles), or modifies infrastructure in the public right of way.
Examples include:
- Street festivals and block parties.
- Parking moving vehicles in restricted parking areas.
- Storing materials on the street or sidewalk, such as industrial trash bins, construction staging equipment, or moving pods.
- Creating a sidewalk café.
- Construction by contractors and developers to install or connect to cable, water, sewer, electrical, gas, or other utility services.
- Construction underneath public streets.
- Installation of materials over a public right of way, such as awnings or scaffolding.
When does LET apply to use permits?
LET applies if all the following are true:
- The public entity owns the property (in this case, the public right of way).
- The public entity issues the private party a street obstruction or other use permit to possess and use a defined portion of the public right of way.
- The permit duration is for thirty continuous days or longer.
- Annual costs for the private party to possess and use the property are $250 or more, as determined by fair market value.
How is LET paid?
The public entity that charges the fee for the permit must collect LET from the permit holder (lessee) and report it to the Department of Revenue on their quarterly leasehold excise tax return.
How can I find out if LET applies?
Contact the Taxpayer Account Administration Division at 360-705-6115.
Request a tax ruling.
References
RCW 82.29A.020 - Definitions.
RCW 82.29A.130 - Exemptions—Certain property.
