The Washington Department of Revenue has amended the state’s administrative code to reflect 2019 legislation that expanded a sales and use tax exemption for personal property sold between political subdivisions (including the state, municipal corporations, counties, cities, and towns) to include sales of personal property as a result of a merger. The rule previously only included sales between municipal corporations resulting from annexation or incorporation under the exemption. The new expanded exemption highlights the fact that sales to the state and municipal corporations are generally subject to sales tax in Washington.
The amendment also creates a new sales and use tax exemption on sales from one municipal corporation to another made under contractual consolidations in which the taxpayer that originally paid the sales/use tax continues to benefit from the personal property. (WAC 458-20-189, Washington Department of Revenue, effective February 27, 2020)