Washington recently released guidance discussing the expansion of its exemption for costs related to building or maintaining farmworker housing. Effective October 1, 2021, the exemption includes labor and services used to construct, repair, decorate, or improve new or existing structures. This includes sales of tangible personal property that become ingredients or components of the housing.
To claim the farmworker housing exemption, taxpayers must ensure that (1) at least 50% of the housing units in the development are for farmworker housing, (2) they build the dwellings according to state code if provided on a year-round basis, and (3) they use the housing for at least five consecutive years from when the state approves the housing for occupancy. Housing is not eligible for the exemption when built for the employer, family members of the employer, persons owning stock or shares in a farm partnership or corporation business, or exclusively for workers in the United States on an H-2A visa.