Hog fuel used to produce electricity, steam, heat or biofuel

Hog fuel (wood waste and other wood residuals, including forest-derived biomass) is exempt from Washington sales and use tax when used to produce electricity, steam, heat or biofuel. Buyers must file an annual report for each facility, and closing a facility with job losses can make two years of the exemption due. The exemption expires June 30, 2034.

Who qualifies

• A purchaser of hog fuel that uses it to produce electricity, steam, heat or biofuel, for example a mill, a biomass power plant or a biofuel producer.

What qualifies

• "Hog fuel": wood waste and other wood residuals, including forest-derived biomass.
• Used to produce electricity, steam, heat or biofuel. "Biofuel" is a liquid or gaseous fuel from organic matter intended for transportation use, including biodiesel, renewable diesel, ethanol, renewable natural gas and renewable propane.

Not covered

• Firewood and wood pellets. The statute excludes them from hog fuel.
• Hog fuel bought for any other use.
• Purchases after the section expires on June 30, 2034.

What the buyer gives

The Buyer's Retail Sales Tax Exemption Certificate, form REV 27 0032 (6/17/25), line 5l: "Hog fuel used to produce electricity, steam, heat, or biofuel." 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. No application is required. DOR requires an Annual Tax Performance Report by May 31 of the following year, and RCW 82.32.605 requires a separate report for each facility the taxpayer owns or operates in Washington. The buyer also completes the Buyers Sales and Use Tax Preference Addendum in My DOR when filing the tax return.

What the seller keeps

RCW 82.08.956(1): "This exemption is available only if 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

• Selling wood pellets or firewood under line 5l. Both are excluded.
• Filing one annual report for several plants. RCW 82.32.605 requires a separate report for each facility.
• Not planning for a closure. If a facility with reported jobs closes and jobs are lost, the department must declare the exemption claimed for the previous two calendar years immediately due.

Common questions

Is wood waste burned in a mill boiler exempt?

Yes, if it is used to produce steam or heat. Hog fuel is wood waste and other wood residuals, including forest-derived biomass; firewood and wood pellets are excluded.

Does hog fuel used to make renewable natural gas qualify?

Yes. "Biofuel" includes renewable natural gas, along with biodiesel, renewable diesel, ethanol and renewable propane.

What reports does the buyer file?

An Annual Tax Performance Report by May 31 for each Washington facility, and the Buyers Sales and Use Tax Preference Addendum with the excise tax return. Missing the annual report makes 35 percent of the prior year's preference due (RCW 82.32.534(4)).

Sources

• RCW 82.08.956 (1)-(4)
• RCW 82.12.956 (1)-(3) use tax
• RCW 82.32.605 (1)-(2) per-facility report
• RCW 82.32.534 (1)(a), (4)(a) annual tax performance report and penalty
• DOR form REV 27 0032 (6/17/25), Buyer's Retail Sales Tax Exemption Certificate Page 1 single use/blanket; page 3 line 5l; page 6 line 5l instructions; page 4 certification and retention
• DOR Tax incentive programs Renewable Energy/Green Incentives: Hog fuel sales & use tax exemption
• 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