May 31 Deadline for Washington’s Required Annual Tax Performance Report

Each year, the Washington State Department of Revenue (DOR) requires taxpayers that participated in at least one of the state’s tax incentive programs to file an Annual Tax Performance Report (previously called the Annual Survey and Annual Report). This filing is due by May 31 following the year in which the taxpayer was eligible to claim the incentive, credit, or reduced tax rate.

Businesses must electronically file a separate report for each tax reporting account in Washington through the state’s MyDOR system. Failure to file a completed report by the May 31 deadline could result in a partial loss of the applicable incentive, credit, or reduced tax rate.  

Annual Tax Performance Report—Required Filers

Participation in the following programs requires taxpayers to file an Annual Tax Performance Report with the DOR:

Manufacturing

  • Fruit and vegetable processors’ business and occupation (B&O) tax exemption
  • Dairy and seafood products B&O tax exemption
  • Sales and use tax deferral or waiver on construction of cold storage and certain food manufacturing or processing facilities
  • Biotechnology and medical device manufacturing sales and use tax deferral or waiver
  • Reduced B&O tax rate for timber extraction and manufacturing
  • Sales and use tax deferral or waiver for locating corporate headquarters in a community empowerment zone
  • Sales and use tax deferral for manufacturing facilities in counties with high unemployment
  • Sales tax deferral certificate for eligible investment projects for manufacturers
  • Reduced B&O tax rate for manufacturers of solar energy systems and their components

Aerospace

  • B&O tax credit for aerospace product development expenditures
  • Reduced B&O tax rate for aerospace businesses
  • Sales and use tax exemption for construction of new facilities used for airplane repair and maintenance
  • Sales and use tax exemption for the construction of new facilities used to manufacture commercial airplanes, fuselages, or wings of commercial airplanes
  • B&O tax credit for property and leasehold taxes paid on aerospace manufacturing facilities
  • Sales and use tax exemption for aerospace businesses for computer hardware, software, or peripherals

Aluminum Smelting

  • Reduced B&O tax for aluminum smelting
  • B&O tax credit to offset the state portion of sales tax on materials used in aluminum smelting
  • B&O tax credit to offset property tax for aluminum smelters
  • Use tax exemption on brokered natural gas

Semiconductor Manufacturing

  • Reduced B&O tax rate for manufacturers of semiconductor materials

  • Sales and use tax exemption for purchases of semiconductor gases and chemicals

Miscellaneous

  • Public utility tax (PUT) exemption on power for electrolyte processing

  • B&O tax and PUT credit for hiring unemployed veterans

  • Customized employment training tax credit
  • Reduced B&O tax rate for newspaper publishers
  • Sales and use tax exemption for purchases of server equipment and power infrastructure for use in eligible data centers
  • Sales and use tax exemption for machinery and equipment used to generate electricity using renewable energy and solar thermal heat systems
  • Sales and use tax exemption on purchases of hog fuel

Penalties

The penalty for failure to file the report on time is 35% of the incentive claimed.

Requesting an Extension

Taxpayers that are unable to file the report by May 31 can request an extension by contacting the DOR in writing.

First-Year Filings

Many first-year filings for incentives must include reports for both the 2017 and 2018 periods.

Wage and Employment Information

To simplify the filing of a report, a taxpayer may authorize the DOR to obtain wage and employment information directly from the Employment Security Department.

We're Here to Help

Filing your Annual Tax Performance Report in a timely manner is critical to maintaining the incentive your business may depend on. If you have any questions about filling out the forms or would like to discuss how you can leverage additional Washington State tax credits and incentives, contact your Moss Adams professional or email statetax@mossadams.com.