Washington Utility Sales Tax Exemption
Washington provides a sales and use tax exemption for electricity, natural gas, and steam used directly in the operation of manufacturing or processing activities. To qualify, the utility usage must be an integral part of producing tangible personal property for sale.
Utility Requirement
To substantiate the exemption, businesses must:
- Conduct and maintain a utility usage study identifying which equipment and processes consume exempt utilities.
- Allocate exempt versus taxable usage and retain engineering calculations or consumption data.
- Maintain detailed records for the Washington Department of Revenue.
Filing Requirements
To claim the exemption, businesses must provide their utility provider with a Manufacturer’s Sales and Use Tax Exemption Certificate issued by the Washington Department of Revenue. If tax has already been paid on exempt usage, businesses may request a refund through the Washington Department of Revenue. Refund claims are generally permitted for up to four years from the date of payment. Proper documentation, including utility studies and billing records, must accompany refund requests.