SALT Report 1221 – The Washington Department of Revenue has issued a sales and use tax brochure explaining the warehouse tax remittance incentive. The incentive permits a business to exempt 100% of the eligible construction costs of qualified warehouses, distribution centers, and grain elevators from the state’s portion of the 6.5% sales or use tax. Cold storage warehouses are eligible for a 100% exemption on certain construction costs and purchases of material-handling and racking equipment. A 50% exemption from the state’s portion of the sales or use tax is available on purchases and installation of material-handling and racking equipment.
The following businesses and facilities may be eligible for the warehouse remittance incentive:
- Wholesalers or third-party warehousers that own or operate warehouses or grain elevators
- Retailers that own or operate distribution centers
- Warehouses and distribution centers that are 200,000 square feet or more
- Warehouses and distribution centers that store finished goods
- Cold storage warehouses that are 25,000 square feet or more, and
- Grain elevators with 1 million bushels or more of grain storage capacity
The following are not eligible for the warehouse remittance incentive:
- Farmers who make wholesale sales of agricultural products
- Manufacturers are not eligible if any part of a manufacturing operation occurs in the warehouse.
Reporting and documentation:
- Warehouse Tax Incentive Application of Remittance filed with the Department each quarter
- No Annual Survey or Report is required
- No application is required prior to construction or acquiring machinery and equipment
- Must retain adequate records so the Department can determine whether the equipment or construction meet all requirements
