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Washington Revised Code Title 82. Excise Taxes § 82.08.965. Exemptions--Semiconductor materials manufacturing (Contingent effective date; contingent expiration date)

Current as of January 01, 2025 | Updated by Findlaw Staff

(1) The tax levied by RCW 82.08.020 does not apply to charges made for labor and services rendered in respect to the constructing of new buildings used for the manufacturing of semiconductor materials, to sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.

(2) To be eligible under this section the manufacturer or processor for hire must meet the following requirements for an eight-year period, such period beginning the day the new building commences commercial production, or a portion of tax otherwise due will be immediately due and payable pursuant to subsection (3) of this section:

(a) The manufacturer or processor for hire must maintain at least 75 percent of full employment at the new building for which the exemption under this section is claimed.

(b) Before commencing commercial production at a new facility the manufacturer or processor for hire must meet with the department to review projected employment levels in the new buildings. The department, using information provided by the taxpayer, must make a determination of the number of positions that would be filled at full employment. This number must be used throughout the eight-year period to determine whether any tax is to be repaid. This information is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.

(c) In those situations where a production building in existence on the effective date of this section will be phased out of operation during which time employment at the new building at the same site is increased, the manufacturer or processor for hire must maintain seventy-five percent of full employment at the manufacturing site overall.

(d) Applications for the exemption under this section must be made at least 90 days before initiation of the construction of the significant semiconductor microchip manufacturing facility in a form and manner prescribed by the department. The person is subject to all the requirements of chapter 82.32 RCW. A person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534.

(3) If the employment requirement is not met for any one calendar year, one-eighth of the exempt sales and use taxes will be due and payable by April 1st of the following year. The department must assess interest to the date the tax was imposed, but not penalties, on the taxes for which the person is not eligible.

(4) The exemption applies to new buildings, or parts of buildings, that are used exclusively in the manufacturing of semiconductor materials, including the storage of raw materials and finished product.

(5) For the purposes of this section:

(a) “Commencement of commercial production” is deemed to have occurred when the equipment and process qualifications in the new building are completed and production for sale has begun.

(b) “Full employment” is the number of positions required for full capacity production at the new building, for positions such as line workers, engineers, and technicians.

(c) “Semiconductor materials” has the same meaning as provided in RCW 82.04.241.

(6) No exemption may be taken after the expiration date of this section, however all of the eligibility criteria and limitations are applicable to any exemptions claimed before that date.

(7) Pursuant to RCW 82.32.790, this section is contingent on the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington.

(8) This section expires January 1, 2034, unless the contingency in RCW 82.32.790(2) occurs.

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Cite this article: FindLaw.com - Washington Revised Code Title 82. Excise Taxes § 82.08.965. Exemptions--Semiconductor materials manufacturing (Contingent effective date; contingent expiration date) - last updated January 01, 2025 | https://codes.findlaw.com/wa/title-82-excise-taxes/wa-rev-code-82-08-965/

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