Washington Enacts Exemption for Indian Tribe Telecommunications Infrastructure Projects

Effective July 1, 2023, Washington has enacted a sales and use tax exemption for telecommunications infrastructure projects involving a federally recognized Indian tribe. The exemption is available to a wholly-owned subsidiary of a federally recognized tribe located in a county that borders the Pacific Ocean that is developing a qualified infrastructure project. “Qualified infrastructure project” means the construction of buildings and utilities related to the deployment of a modern global internet and telecommunications infrastructure that occurs in part in a distressed area that is located on the coast of Washington. The exemption applies to the following items:

      • Labor and services rendered in respect to the installation of any equipment or other tangible personal property incorporated into a qualified infrastructure project; and
      • Building materials, telecommunications equipment, and tangible personal property incorporated into a qualified infrastructure project.

A qualified infrastructure project owner must submit an application to the Washington Department of Revenue (DOR) in order to obtain an exemption certificate. In order to claim the exemption, a qualified infrastructure project owner must provide the seller with the exemption certificate. The exemption certificate is effective on the date the application is received by the DOR. The exemption certificate expires on the date the project is certified as operationally complete by the qualified infrastructure project owner or January 1, 2030, whichever is first. The qualified infrastructure project owner must notify the DOR when the project is certified as operationally complete.

The total amount of state sales and use tax exempted may not exceed $8 million. A qualified infrastructure project owner must pay any tax due within 60 days of the expiration of the exemption certificate. The exemption does not apply to local use taxes.

The exemption expires on January 1, 2030.

(Ch. 355 (H.B. 1711), Laws 2023, effective July 1, 2023)

Posted on May 24, 2023