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Intended audience: Manufacturers and processors for hire with research and development operations.
On July 25, 2022, the Board of Tax Appeals (BTA), a separate agency from the Department of Revenue, issued a decision in Terrapower LLC v. Dep’t of Revenue, BTA Docket No.19-065 (2022) that concluded a manufacturer does not need to manufacture items for sale to qualify for the retail sales tax exemption on purchases of qualifying machinery and equipment used in its research and development operation if all other requirements are met.
The department does not plan to appeal this decision.
Further clarification or guidance is being developed and will be published at a later date.
More information
ETA 3127.2009 Manufacturers’ Machinery and Equipment Exemption – Research and Development
Questions
Please visit dor.wa.gov or call 360-705-6705. For questions about whether your business qualifies for the exemption, you can request a tax ruling.
