Each year, the Washington State Department of Revenue (DOR) requires taxpayers who participated in one or more of the state’s tax incentive programs to complete and file a survey or report regarding the programs’ use. These filings are due by April 30 following the year in which the incentive, credit, or reduced tax rate was claimed.
Businesses must file a separate survey or report for each tax reporting account in Washington. The survey or report must be filed electronically through the state’s e-filing system. Failure to file a completed survey or report by the deadline could result in a loss of the applicable incentive, credit, or reduced tax rate.
Who Must File an Annual Survey?
Participation in the following tax incentive programs requires you to file a tax incentive survey with the DOR:
- Fruit and vegetable processors’ business and occupation (B&O) tax exemption
- Dairy and seafood products B&O tax exemption
- Sales and use tax deferral or waiver on construction of cold storage and certain food manufacturing or processing facilities
- Biotechnology and medical device manufacturing sales and use tax deferral or waiver
- Reduced B&O tax rate for timber extraction and manufacturing
- Sales and use tax deferral or waiver for locating corporate headquarters in a community empowerment zone
- Sales and use tax deferral (or waiver, for manufacturing facilities) in counties with high unemployment
- Customized employment training tax credit
Who Must File an Annual Report?
Participation in the following tax incentive programs requires you to file an annual report with the DOR:
Aerospace
- B&O tax credit for aerospace product development expenditures
- Reduced B&O tax rate for aerospace businesses
- B&O tax credit for property and leasehold taxes paid on aerospace manufacturing facilities
Aluminum Smelting
- Reduced B&O tax for aluminum smelting
- B&O tax credit to offset the state portion of sales tax on materials used in aluminum smelting
- B&O tax credit to offset property tax for aluminum smelters
- Use tax exemption on brokered natural gas
Semiconductor Manufacturing
- Reduced B&O tax rate for manufacturers of semiconductor materials
- Sales and use tax exemption for purchases of semiconductor gases and chemicals
Miscellaneous
- Public utility tax exemption on power for electrolyte processing
- Reduced B&O tax rate for newspaper publishers
- Reduced B&O tax rate for manufacturers of solar energy systems and their components
- Sales and use tax exemption for purchases of server equipment and power infrastructure for use in eligible data centers
Extensions and Other Details
If you’re unable to file the survey or report by April 30, you can request an extension by contacting the DOR—prior to the due date—at (360) 570-3265. (On its voice mail menu, press six, then two.)
Note that nearly all forms—including those for high tech, biotechnology, aerospace, fruit and vegetable processors, seafood, timber, dairy, customized employment, and cold storage—must be filed electronically using the DOR’s e-filing services. Note also that many first-year filings for the incentives must include surveys for both the 2014 and 2015 periods.
Governor Jay Inslee recently signed into law Engrossed Substitute House Bill 2540, as passed by the 2016 Washington State Legislature. The law modifies report and survey filing requirements for incentives received by taxpayers beginning in 2016. Effective July 1, 2016, the penalty for failure to file the report or survey on time will be reduced from 100 percent to 35 percent of the incentive claimed. Additionally, the deadline for filing the report and survey will be extended by one month beginning next year.
We're Here to Help
Filing your survey or report in a timely manner is critical to maintaining the credit or incentive your business may depend on. If you have any questions about filling out the forms or would like to discuss how you can leverage additional Washington state tax credits and incentives, please contact:
Marke Greene, Partner
(206) 302-6496
marke.greene@mossadams.com
Sarah Correia, Senior Manager
(509) 834-2420
sarah.correia@mossadams.com