Computer hardware, peripherals, software and installation used by the aerospace industry

Aerospace businesses pay no Washington sales or use tax on computer hardware, peripherals and software used primarily to develop, design and engineer aerospace products or to provide aerospace services, or on the labor to install them. It covers computers that do not already qualify for the manufacturing machinery and equipment exemption. The exemption carries an annual report, and it expires July 1, 2040.

Who qualifies

• DOR lists: manufacturers and processors for hire of commercial airplanes or their components; non-manufacturers in the business of aerospace product development; certified FAR repair stations; and aerospace tooling manufacturers.
• "Aerospace products" are commercial airplanes and their components; machinery and equipment designed and used primarily to maintain, repair, overhaul or refurbish commercial airplanes or components by FAR part 145 certificated repair stations; and tooling specially designed to manufacture commercial airplanes or components.
• "Aerospace services" are the maintenance, repair, overhaul or refurbishing of commercial airplanes or their components, but only when performed by a FAR part 145 certificated repair station.
• A "commercial airplane" is an airplane certified by the FAA to carry persons or property, and any military derivative of one; a "component" is a part or system FAA-certified for installation in one.

What qualifies

• Computer hardware, computer peripherals and software used primarily in the development, design and engineering of aerospace products or in providing aerospace services.
• Peripherals include keyboards, monitors, mouse devices and other accessories that operate outside the computer.
• Labor and services to install that hardware, those peripherals or that software.
• Only items "not otherwise eligible" for the manufacturing machinery and equipment exemption in RCW 82.08.02565.

Not covered

• Cables, conduit, wiring and similar property. The statute excludes them from "peripherals."
• Computers that qualify as manufacturing machinery and equipment. Those are bought under the M&E exemption on form REV 27 0021 instead.
• Computers whose primary use is something other than aerospace development, design and engineering, or aerospace services.
• Repair charges. The statute exempts installation labor only; it does not name repair.
• Computer hardware for printers and publishers. That is a different exemption (line 5h, RCW 82.08.806).
• Purchases after the section expires on July 1, 2040.

What the buyer gives

The Buyer's Retail Sales Tax Exemption Certificate, form REV 27 0032 (current revision 6/17/25), line 5f: "Computer hardware, peripherals, software and related installation, used by the aerospace industry." The buyer ticks single use or blanket (blanket works while buyer and seller have at least one sale within 12 months), enters the seller's name, mailing address and the date, checks the line named below, lists the items purchased, and completes the certification block: type of entity, type of business, Account ID, buyer name and title, street address, and signature. The form says it is not for resale purchases. The form adds: "Buyers must complete the Buyers Sales and Use Preference Addendum with their excise tax return." DOR also requires an Annual Tax Performance Report by May 31 of the year after the exemption is claimed. No application is required.

What the seller keeps

RCW 82.08.975(2): "The exemption is available only when the buyer provides the seller with 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." Form REV 27 0032 says: "Seller must retain the original of this certificate for their records. Do not send a copy of this certificate to the Department of Revenue." RCW 82.32.070(1) requires taxpayers to "keep and preserve, for a period of five years, suitable records as may be necessary to determine the amount of any tax for which the taxpayer may be liable." Under RCW 82.08.050(4) a seller is not relieved of the tax unless it keeps proper records of exempt sales and provides them when asked; (7)(a) relieves a seller that obtains a fully completed certificate within 90 days after the sale, and (7)(b) allows 120 days after a department request to prove the sale was not taxable or obtain a fully completed certificate taken in good faith. RCW 82.04.470 governs reseller permits and wholesale sales; it is not the documentation rule for this exempt retail sale.

Common mistakes

• Using line 5f for equipment that is manufacturing M&E. The statute covers only items not otherwise eligible under RCW 82.08.02565; computers that qualify as M&E belong on form REV 27 0021.
• Putting cabling and wiring on the certificate. They are excluded from "peripherals."
• Assuming any repair station qualifies. Aerospace services count only when performed by a FAR part 145 certificated repair station.
• Skipping the annual report. Under RCW 82.32.534(4), failing to file it makes 35 percent of the preference claimed for the previous year immediately due, and 50 percent for a repeat failure.
• Forgetting the Buyers Sales and Use Tax Preference Addendum when filing the excise tax return.

Common questions

Can an aerospace engineering firm that does not build anything buy engineering workstations tax-free?

Yes, if it is in the business of aerospace product development and the workstations are used primarily to develop, design and engineer aerospace products. DOR lists non-manufacturers in aerospace product development among those eligible.

Are monitors and keyboards covered?

Yes. The statute defines peripherals to include keyboards, monitors, mouse devices and other accessories outside the computer. Cables, conduit and wiring are excluded.

Is the installer's labor exempt?

Yes. Labor and services to install the qualifying hardware, peripherals or software are exempt.

What paperwork does the buyer file with DOR?

An Annual Tax Performance Report by May 31 of the following year, and the Buyers Sales and Use Tax Preference Addendum with the excise tax return. The certificate itself goes to the seller, not to DOR.

Sources

• RCW 82.08.975 (1)-(4)
• RCW 82.12.975 (1)-(3) use tax
• RCW 82.32.550 (1)-(2) commercial airplane and component
• RCW 82.32.534 (1)(a), (4)(a) annual tax performance report and penalty
• RCW 82.08.02565 (1)(a) M&E exemption (items eligible there are excluded here)
• DOR form REV 27 0032 (6/17/25), Buyer's Retail Sales Tax Exemption Certificate Page 1 single use/blanket; page 3 lines 5f and 5h; page 6 line 5f and 5h instructions; page 4 certification and retention
• DOR Tax incentive programs Aerospace Industry: Sales & use tax exemption for aerospace businesses for computer hardware/software/peripherals
• RCW 82.08.050 (4), (7)(a)-(c) seller records and certificate timing
• RCW 82.32.070 (1) five-year record retention
• RCW 82.04.470 (1), (7) reseller permits and wholesale sales