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New Washington state heavy equipment rental tax policies in effect

by Brock Huffstutler

Washington DORThe Washington State Department of Revenue (DOR) has published two Special Notices that apply to those involved in heavy equipment rentals. Each contains important tax information that went into effect in 2022.

The first notice, dated Jan. 5, 2021, pertains to property tax exemption for heavy equipment rental property and lays out the details of a bill passed by the state Legislature in 2020, which creates:

  • A property tax exemption for heavy equipment rental property owned by a heavy equipment rental dealer (effective for 2021 assessment year).
  • A heavy equipment rental tax of 1.25% that will be imposed on each in-state rental of heavy equipment rental property (effective Jan. 1, 2022).

Click here to view the notice, which provides definitions of “heavy equipment rental property,” who is considered to be a “heavy equipment rental dealer,” how to claim the exemption and more.

The second notice, dated Sept. 17, 2021, provides further information on the new heavy equipment rental tax that went into effect on Jan. 1, 2022.

Click here to view the notice, which includes guidance on handling the tax on customer invoices, when the tax applies, how to submit the tax to the DOR, exceptions to charging the tax and more.