A number of tax changes took effect on July 1 now that the state’s new operating budget has been enacted.
According to the Washington State Department of Revenue, tax preferences that expired on July 1 are:
- The sales and use tax exemptions for machinery and equipment used directly for the retail sale of a biodiesel blend and E85 motor fuel and fuel delivery vehicles used to distribute such fuels
- The business and occupation (B&O) tax exemption for credits against power contracts with, or amounts received from, the Bonneville Power Administration
- The B&O deduction for the retail sale or distribution of biodiesel fuel and E85 motor fuel
- The sales and use tax exemptions for property and services related to electrification systems to power heavy duty diesel vehicles
- The sales and use tax exemptions for property and services that enable heavy duty diesel vehicles to operate with onboard electrification systems
- The B&O tax credit for forest-derived biomass sold, transferred or used for the production of electricity, steam, heat or biofuel
Extended tax preferences include:
- B&O tax exemptions for fruits and vegetables, manufacturing dairy products, manufacturing seafood products, and wholesale sales to persons who transport these goods out of state in the ordinary course of business
- The sales and use tax exemptions available to data centers on their purchases of server equipment and power infrastructure
- Certain tax preferences for aluminum smelters
- The sales and use tax exemptions on purchases of wax and ceramic materials used to create molds during the process of creating ferrous and nonferrous investment castings used in industrial application
- The commute trip reduction credit
New or changed tax preferences, according to the Department of Revenue, are:
- The sales and use tax exemption for passenger cars, light duty trucks and medium duty passenger vehicles, and certain used vehicles, that are exclusively powered by a clean alternative fuel is extended to July 1, 2019 with the following changes:
- The exemption is expanded to cover plug-in hybrids that can travel at least 30 miles on battery power alone.
- The exemption is limited to vehicles with a selling price plus trade-in (or fair market value for leased vehicles) of $35,000 or less (for sales or leases signed after the effective date).
- Used vehicles may no longer qualify for the exemption.
- For leases signed before the effective date, lease payments will continue to be exempt regardless of the fair market value of the lease.
- Agricultural tax preferences to eligible beekeepers are extended. “Honey bee products” is defined and added to the definition of agricultural products. Repeals bee industry incentives that are due to expire in 2017 and the JLARC review of those incentives and makes them permanent.
- Marijuana excise taxes paid to the Liquor and Cannabis Board are now consolidated into a single 37 percent tax on the consumer.
- Temporary sales and use tax exemptions are available for marijuana products and low THC products provided by a collective garden to qualifying patients and designated providers, if all are in compliance with chapter 69.51A RCW. The exemptions are effective from July 1, 2015 to June 30, 2016. A sales and use tax exemption for certain marijuana products will begin July 1, 2016.
Other changes effective July 1 are oil spill response and administration taxes, which have been expanded to the receipt of crude oil or petroleum products at a bulk oil terminal with Washington from a railroad car.
Bills with effective dates later than July 1, 2015 will be included in the department’s 2015 Summary of Tax Legislation published later this month.
For more details about the tax-related bills passed this session, visit https://dor.wa.gov.