Washington State Tax Planning Strategies
Reverse Audit for Manufacturers
Manufacturing companies in Washington are allowed a sales and use tax exemption when they buy manufacturing machinery and equipment and when they repair or maintain this equipment. While most companies use this exemption when making equipment purchases, many overpay tax in the repair and maintenance areas.
Moss Adams’ reverse audit process involves working with companies to obtain a refund of the overpaid sales or use tax. These refunds may be obtained directly from the vendors who charged the tax. We have developed a streamlined process to obtain the refunds directly from the state—with interest.
Processor for Hire
Manufacturers with facilities or related entities outside of Washington can reduce business and occupation (B&O) taxes while still taking advantage of the manufacturer’s exemption in Washington. A “processor for hire” in Washington will pay B&O tax only on the value of the services provided and may be able to eliminate tax on the value of the materials sold.
Sales Company
The B&O taxes in Washington are structured like a pyramid in that a product manufactured in Washington will have at least two levels of tax—a manufacturing tax and a selling tax. Using a separate distribution company can reduce the B&O taxes paid by the distribution company to customers located outside of Washington.
State and Local Tax SCORE!
A Systems Control & Operations Risk Evaluation (SCORE!) gives companies an overall assessment of their B&O reporting, including an overall review of taxable and non-taxable purchases. A SCORE! engagement is intended to give a company some reassurance that they are paying their Washington state taxes properly and not missing opportunities for tax savings.
Incentives and Credits
We help our clients ensure they are taking advantage of all the tax incentives they are eligible for in the state of Washington. Washington state offers tax incentives for the following industries:
- Aerospace
- Biofuel
- Farming and agriculture
- Food processing
- Manufacturing
- Semiconductor
Audit Defense
We help facilitate and expedite the Department of Revenue (DOR) audit process by acting as an intermediary between the client and the DOR auditor. We assist with compiling the necessary data in the proper format and work with the auditor to resolve issues that may arise.
Washington state Tax Planning Strategies Contacts
Washington
Rachel Le Mieux
206-302-6314
Oregon
Rob O'Neill
503-478-2339
California
Bob Reynolds
916-503-8138
Arizona
David Estrada
480-366-8325
New Mexico
Steve Keene
505-830-6206
