Did your business participate in one of the below credits, exemptions, deferrals or preferential business & occupation (B&O) tax rates in 2017 offered by the state of Washington?  If yes, you may have a responsibility to file an Annual Tax Incentive Survey or an Annual Tax Incentive Report.  The survey or report must be filed electronically with the Department of Revenue by May 31, 2018.  You may file the survey or report by logging into your Secure Access Washington (SAW) account with the Department of Revenue.

If you participated in any of the following incentive programs, you are required to file an Annual Tax Incentive Survey:

Credits

Seafood Product Manufacturers B&O Tax Exemption
Aerospace Preproduction Expenditures B&O Tax Credit (Must also file Annual Tax Incentive Report) Semiconductor Sales & Use Tax Exemption (Expires December 1, 2018)
Aerospace Property & Leasehold Excise Taxes B&O Tax Credit (Must also file Annual Tax Incentive Report) Solar Energy Systems Manufacturers or Processors Sales & Use Tax Exemption (Expires December 1, 2018)
Aluminum Smelters Property Tax B&O Tax Credit (Must also file Annual Tax Incentive Report)

Deferrals

Aluminum Smelters Sales & Use Tax Credit Biotechnology & Medical Device Manufacturing Sales & Use Tax Deferral (Expired January 1, 2017)
Customized Employment Training Credit (Program expires July 1, 2017) Cold Storage Warehouse Sales & Use Tax Deferral
Renewable Energy Light and Power Business PUT Credit Dairy Product Manufacturers Sales & Use Tax Deferral
B&O and PUT Credit for Hiring Unemployed Veterans Fruit and Vegetable Processors Sales & Use Tax Deferral

Deductions & Exemptions

High Technology Sales & Use Tax Deferral (Expired January 1, 2015)*
Aerospace Computer, Software, and Peripherals Sales & Use Tax Exemption High Unemployment County Sales & Use Tax Deferral
Aerospace FAR Part 145 Repair Station Sales & Use Tax Exemption (Must also file Annual Tax Incentive Report) Manufacturer’s Sales & Use Tax Deferral (No longer taking applications for program.  All projects allowed by statute were approved as of March 2016)
Aerospace Leasehold Excise Tax Exemption for Superefficient Airplane Manufacturers Rural County Sales & Use Tax Deferral
Aerospace Manufacturing Site Sales & Use Tax Exemption Seafood Product Manufacturers Sales & Use Tax Deferral
Aerospace Personal Property Tax Exemption for Superefficient Airplane Manufacturers

Reduced Rates

Agricultural Crop Protection Products Aerospace FAR Part 145 Repair Stations Reduced B&O Tax Rate (Must also file Annual Tax Incentive Report)
Aluminum Smelters Use Tax Exemption for Compressed/Liquefied Natural Gas (Must also file Annual Tax Incentive Report) Aerospace Manufacturers Reduced B&O Tax Rates
Dairy Products Manufacturers B&O Tax Deduction Aerospace Product Development Reduced B&O Tax Rate
Data Center Sales & Use Tax Exemption (Must also file Annual Tax Incentive Report) Aluminum Smelters Reduced B&O Tax Rates (Must also file Annual Tax Incentive Report)
Fruit and Vegetable Businesses B&O Tax Exemption Solar Energy Systems Manufacturers or Wholesalers Reduced B&O Rates (Expires June 30, 2017.  Must also file Annual Tax Incentive Report)
Hog Fuel Sales & Use Tax Exemption Timber Industry B&O Reduced Rates
Public Research University Machinery and Equipment Sales & Use Tax Exemption
Renewable Energy Equipment Sales & Use Tax Exemption

 

If you participated in any of the following incentive programs, you are required to file an Annual Tax Incentive Report:

Aerospace

Sales and use tax exemption for certain property used at aluminum smelters
Reduced Business and Occupation (B&O) tax rate for FAR Part 145 certified repair stations Use tax exemption for the use of natural gas
Sales & Use Tax Exemption for FAR Part 145 certified repair stations

Semiconductor Cluster Incentives

Reduced B&O tax rate for manufacturers and processors for hire of commercial airplanes and component parts Reduced B&O tax rate for manufacturers and processing for hire semiconductor materials (Expires December 1, 2018)
B&O tax credit or exemptions for property and leasehold taxes Sales and use tax exemption for gases and chemicals used by a manufacturer or processor for hire in the production of semiconductor materials (Expires December 1, 2018)
B&O tax credit for Aerospace product development spending

Other

Sales and use tax exemption for labor, services, and personal property related to manufacturing of commercial airplanes Sales and use tax exemption on the purchase of eligible server equipment and power infrastructure for use in eligible data centers
Reduced B&O tax rate for Aerospace product development for others Public utility tax exemption for certain sales of electricity to electrolytic processing businesses
B&O tax credit for Aerospace product development spending by non-manufacturers B&O tax deduction for government funded mental health or chemical dependency services

Aluminum Smelter

Reduced B&O tax rate for printing and/or publishing newspapers
Reduced B&O tax rate for aluminum smelters Sales and use tax exemption on the purchase of machinery and equipment used in the production of compressed natural gas or liquefied natural gas as transportation fuel
B&O tax credit for property taxes for certain aluminum smelter property

 

If you fail to file the survey or report for a tax incentive claimed for the previous year will result in a 35 percent penalty of the amount of the tax preference claimed, and an additional 15 percent of the amount of the tax preference claimed for the previous calendar year if the person has previously been assessed.

You must continue to file annual tax incentive surveys or reports even if the incentive claimed has expired.

All surveys and reports must be filed electronically.  The Department of Revenue may allow you to file an extension of time to file the survey so long as you request the extension prior to the due date of May 31, 2018.

Engrossed Substitute House Bill (ESHB) 1296, Chapter 135, Laws of 2017 provides that effective January 1, 2018, the Annual Tax Incentive Survey and Annual Tax Incentive Report will be consolidated into one annual tax performance report. This consolidated report will be due on May 31 of the year following any calendar year in which a person was eligible to claim the tax preference. ESHB 1296 will also permit taxpayers to opt to allow the Employment Security Department to release certain employment and wage information from unemployment insurance records to the Department and the joint legislative audit and review committee. This option is intended to reduce the reporting burden for taxpayers. This will be effective with the 2018 tax preference filing due on May 31, 2019.

If you have any questions or need assistance in filing the survey or report, please contact Rachel A. Le Mieux or Sonjia Barker at (206) 382-7777.

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