Washington Issues Guidance on Aerospace Manufacturing Exemption

Wednesday, July 16th, 2014


The Washington Department of Revenue ("Department") recently issued a special notice on a new exemption for the construction of new aerospace manufacturing facilities.

A new law exempts sales to manufacturers constructing new facilities that will be used primarily to manufacture (1) commercial airplanes or (2) fuselages or wings for commercial airplanes. The exemption also applies to sales to port districts, political subdivisions, and municipal corporations if they will construct facilities to lease to such manufacturers.

The exemption applies to three kinds of charges. First, it applies to charges for labor and services related to constructing the new facilities. Second, it applies to charges for materials incorporated as part of the construction. Third, it applies to charges for labor and services related to installing building fixtures that do not qualify for the manufacturing machinery exemption.

This exemption had been contingent upon a significant commercial airplane manufacturing program being sited in Washington. The Department recently determined that the requirements for this contingency were met. As a result, the exemption took effect on July 9, 2014.


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