Exemptions — Sales of machinery and equipment to public research institutions

# (1)

# (a)

The tax levied by RCW 82.08.020 does not apply to sales to a public research institution of machinery and equipment used primarily in a research and development operation, or to sales of or charges made for labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the machinery and equipment.

# (b)

Sellers making tax-exempt sales under this section must obtain from the purchaser 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)

A public research institution claiming the exemption provided in this section must file a complete annual tax performance report with the department under RCW 82.32.534 .

# (3)

For purposes of this section, the following definitions apply:

# (a)

"Machinery and equipment" means those fixtures, pieces of equipment, digital goods, and support facilities that are an integral and necessary part of a research and development operation, and tangible personal property that becomes an ingredient or component of such fixtures, equipment, and support facilities, including repair parts and replacement parts. "Machinery and equipment" may include, but is not limited to: Computers; software; data processing equipment; laboratory equipment, instrumentation, and other devices used in a process of experimentation to develop a new or improved pilot model, plant process, product, formula, or invention; vats, tanks, and fermenters; operating structures; and all equipment used to control, monitor, or operate the machinery and equipment.

# (b)

"Machinery and equipment" does not include: (i) Hand-powered tools; (ii) Property with a useful life of less than one year; (iii) Buildings; and (iv) Those building fixtures that are not an integral and necessary part of a research and development operation and that are permanently affixed to and become a physical part of a building, such as utility systems for heating, ventilation, air conditioning, communications, plumbing, or electrical.

# (c)

"Primarily" means greater than fifty percent as measured by time. If machinery and equipment is used simultaneously in a research and development operation and also for other purposes, the use for other purposes must be disregarded during the period of simultaneous use for purposes of determining whether the machinery and equipment is used primarily in a research and development operation.

# (d)

"Public research institution" means any college or university included within the definitions of state universities, regional universities, or state college in RCW 28B.10.016 .

# (e)

"Research and development operation" means engaging in research and development as defined in RCW 82.63.010 . [ 2020 c 139 s 12 ; 2011 c 23 s 4 .] Notes: Effective date — 2011 c 23: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [April 11, 2011]." [ 2011 c 23 s 8 .] Construction — 2011 c 23: "Nothing in this act may be construed as a repudiation of any provision of WAC 458-20-13601." [ 2011 c 23 s 11 .] Findings — 2011 c 23: See note following RCW 82.08.02565 .