A chapter 82.85 deferral certificate let a manufacturer building a new, renovated or expanded plant defer state and local sales and use tax, including regional transit sales tax, on the qualified buildings and machinery. This one must be repaid: 10 percent a year for ten years, starting in the fifth year after completion. DOR lists the program as expired January 1, 2026. The seller keeps a copy of the DOR certificate.
Who qualifies
- A manufacturer holding a deferral certificate DOR issued under RCW 82.85.050 for an eligible investment project.
- DOR: only two new manufacturing facilities per calendar year could be approved, one east and one west of the Cascade crest, and the deferral applies only to tax on the first $10 million of costs for qualified buildings and machinery and equipment.
- A lessor qualifies only if it owns the building, machinery and equipment outright or passes the full economic benefit to the lessee by written contract.
What qualifies
- Purchases of qualified buildings and machinery and equipment for the project named on the certificate, within the deferral amount.
- The certificate covers state and local sales and use taxes under chapters 82.08, 82.12, 82.14 and 81.104 RCW; the last is regional transit authority tax, which the other deferrals in this set do not list.
Not covered
- Costs above the first $10 million (DOR).
- Projects that already received a deferral under this chapter or chapter 82.60 RCW.
- New applications: DOR lists the program as expired January 1, 2026, and the chapter's definitions and application sections expired that day.
- Machinery that the manufacturing machinery and equipment exemption already covers is better bought on form REV 27 0021, which is an exemption, not a deferral.
What the buyer gives
A copy of the sales and use tax deferral certificate DOR issued for the project. DOR required the application before construction or acquisition of machinery and equipment began; there is no buyer-completed form.
What the seller keeps
Chapter 82.85 RCW has no seller-specific rule. Keep a copy of the certificate as proper records of a non-taxable sale (RCW 82.08.050(4)) for five years (RCW 82.32.070(1)), and confirm the purchase is for the project on the certificate. DOR's rule for the chapter 82.60 deferral (WAC 458-20-24001(9)) shows its approach: the seller keeps a copy for at least five years and still owes B&O tax.
Common mistakes
- Telling the buyer the tax is forgiven. DOR: "This is a deferral, not an exemption or waiver." It is repaid over ten years.
- Leaving regional transit tax on the invoice. The certificate covers chapter 81.104 RCW taxes too.
- Using the certificate past the $10 million cap. Ask the buyer how much deferral remains.
Common questions
- When does a manufacturer repay an Invest in Washington deferral?
- RCW 82.85.060: 10 percent of the deferred tax is due December 31 of the fifth calendar year after DOR certifies the project complete, then 10 percent each December 31 for nine more years. No interest is charged for the deferral period.
- Can a manufacturer still apply?
- No. DOR lists the program as expired January 1, 2026.
- What happens if the plant stops being used for qualified activities?
- The outstanding deferred tax is immediately due (RCW 82.85.080(2)).
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