Some tax changes affecting businesses and workers that are included in Washington’s new state operating budget took effect on July 1. Here are key changes, as compiled by the state Department of Revenue.
Extended tax preferences
• Business and occupation tax exemption for fruits and vegetables, and wholesale sales to persons who transport the goods out of state in the ordinary course of business, is extended until July 1, 2025. The effective date of the preferential rate for fruits and vegetables in RCW 82.04.260 has been delayed until 2025.
• B&O tax exemption for manufacturing dairy products, and wholesale sales of dairy products sold to a manufacturer for use as an ingredient or component in the manufacturing of a dairy product, is extended until July 1, 2025.
• B&O tax exemption for manufacturing seafood products, and wholesale sales of seafood to persons who transport the goods out of state in the ordinary course of business, is extended until July 1, 2025.
• The commute trip reduction credit is extended until 2024. The statewide credit allowance cap is raised to $2.75 million, and the maximum credit per taxpayer is reduced to $100,000. Carryover credits are phased out. A prior bill this legislative session, HB 1299, extended the credit until 2017.
New or changed preferences
• 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.
• Marijuana excise taxes paid to the Liquor and Cannabis Board are consolidated into a single 37 percent tax on the consumer beginning July 1. The legislation also provides temporary sales and use tax exemptions 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 to June 30, 2016. A sales and use tax exemption for certain marijuana products will begin July 1, 2016.
Also effective July 1
• The oil spill response and administration taxes are expanded to the receipt of crude oil or petroleum products at a bulk oil terminal with Washington from a railroad car.
