Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction.
RCW
82.08.02745 and
82.12.02685 provide a retail sales
and use tax exemption for farmworker housing. This section also explains the
exemptions, who is entitled to the exemptions and how to obtain an exemption
certificate.
(2)
Definitions. The following definitions apply throughout this
section.
(a) "Farmworker" means a single
person, or all members of a household, whether such persons are related or not,
if the combined household income earned from farm work is at least $3,000 per
calendar year.
(b) "Farm work"
means services relating to:
(i) Cultivating
the soil, raising or harvesting, or catching, netting, handling, planting,
drying, packing, grading, storing, or preserving in its unmanufactured state
any agricultural or aquacultural commodity;
(ii) Delivering to storage, market, or a
carrier for transportation to market or to processing any agricultural or
aquacultural commodity; or
(iii)
Working in a processing plant and directly handling agricultural or
aquacultural product.
(c)
"Agricultural employer" means any person engaged in agricultural activity,
including the growing, producing, or harvesting of farm or nursery products, or
engaged in the forestation or reforestation of lands, which includes but is not
limited to the planting, transplanting, tubing, precommercial thinning, and
thinning of trees and seedlings, the clearing, piling and disposal of brush and
slash, the harvest of Christmas trees, and other related activities as defined
in RCW
19.30.010; and including any employer engaged
in aquaculture as defined in
RCW
15.85.020.
(d) "Farmworker housing" means all facilities
provided by an agricultural employer, housing authority, local government,
state or federal agency, nonprofit community or neighborhood-based organization
that is exempt from income tax under section 501(c) of the Internal Revenue
Code of 1986 (26 U.S.C. sec. 501(c)), or for-profit provider of housing for
housing farmworkers on a year-round or seasonal basis, including bathing, food
handling, hand washing, laundry, and toilet facilities, single-family and
multifamily dwelling units and dormitories; and including labor camps as
defined under
RCW
70.114A.110.
(i) "Farmworker housing" may include the
following:
(A) Mobile homes, travel trailers,
mobile bunkhouses, modular homes, fabricated components of a house, and tents;
and
(B) Housing occupied by a
household with at least one member who is a farmworker; and
(C) Housing occupied by a farmworker on a
seasonal basis, where the housing is not used as farmworker housing for a
portion of the year, such as when it is rented to the general public when not
being used for farmworker housing.
(ii) "Farmworker housing" does not include:
(A) Housing regularly provided on a
commercial basis to the general public; and
(B) Housing provided by a housing authority
unless at least 80 percent of the occupants are farmworkers whose adjusted
income is less than 50 percent of median family income, adjusted for household
size, for the county where the housing is provided; and
(C) Housing provided to farmworkers providing
services related to the growing, raising, or producing of cannabis.
(e) "Person" means any
individual, receiver, administrator, executor, assignee, trustee in bankruptcy,
trust, estate, firm, copartnership, joint venture, club, company, joint stock
company, business trust, municipal corporation, political subdivision of the
state of Washington, corporation, limited liability company, association,
society, or any group of individuals acting as a unit, whether mutual,
cooperative, fraternal, nonprofit, or otherwise and the United States or any
instrumentality thereof.
RCW
82.04.030.
(f) "Agricultural land" has the same meaning
as "farm and agricultural land" in
RCW
84.34.020(2).
(3)
Retail sales and use tax exemptions
for farmworker housing.
RCW
82.08.02745 and
82.12.02685, respectively, provide
retail sales tax and use tax exemptions for the purchase, construction, and use
of farmworker housing.
(a) Retail sales tax
levied under
RCW
82.08.020 does not apply to charges for labor
and services rendered by any person in respect to the constructing, repairing,
decorating, or improving of new or existing buildings or other structures, in
which at least 50 percent of housing units in the development are used as
farmworker housing, or to sales of tangible personal property that becomes an
ingredient or component of the buildings or other structures during the course
of the constructing, repairing, decorating, or improving the buildings or other
structures.
(b) Use tax levied
under RCW
82.12.020 does not apply to the use of
tangible personal property that becomes an ingredient or component of buildings
or other structures, in which at least 50 percent of the housing units in the
development are used as farmworker housing, during the course of constructing,
repairing, decorating, or improving the buildings or other structures by any
person.
(i) The use tax exemption for
tangible personal property incorporated into buildings or other structures used
as farmworker housing also applies to persons/consumers constructing these
buildings or structures for the federal government or county housing
authorities. See also WAC
458-20-17001 on government
contracting.
(ii) An agricultural
employer claiming the exemption who retitles a used mobile home or titles a new
mobile home acquired from an out-of-state seller must provide a completed
exemption certificate to the department of licensing or its agent to
substantiate the exempt nature of the home.
(c) Both exemptions require that farmworker
housing provided on a year-round basis only applies if that housing is built to
the current building code for single-family or multifamily dwellings according
to the state building code, chapter 19.27 RCW.
(d) Any farmworker housing built under this
section must be used according to this section for at least five consecutive
years from the date the housing is approved for occupancy.
(e) Neither of these exemptions apply to
housing built for the occupancy of an employer, family members of an employer,
or persons owning stock or shares in a farm partnership or corporation
business.
(f) The exemption does
not apply to housing built exclusively for workers in the United States on an
H-2A visa under the United States citizenship and immigration services. If
during any agricultural season in the qualifying five years the housing is
occupied by a farm worker who does not have an H-2A visa, then the housing will
be considered not to be exclusively built for workers on an H-2A
visa.
(g) The exemption is provided
for all housing units in the development and is available only if the buyer
provides the seller with an exemption certificate in a form and manner
prescribed by the department by rule.
(h) Examples of tangible personal property
that may become ingredients or components of buildings or other structures
include, but are not limited to, cement, lumber, nails, paint, and wallpaper.
(i) Appliances and furniture including, but
not limited to, stoves, refrigerators, bed frames, lamps and television sets,
bolted or strapped directly to the building or structure are considered
components of the building or structure. Additionally, appliances and furniture
bolted or strapped to another item that is bolted or strapped directly to the
building or structure (e.g., a television set bolted to a refrigerator that is
strapped to the structure) are considered components of the building or
structure.
(ii) Items that are not
bolted or strapped directly to the building or structure, or to another item
similarly bolted or strapped, do not qualify for this exemption. These items
include, but are not limited to, kitchen utensils, mattresses, bedding,
portable heating units, and throw rugs. Stoves, refrigerators, bed frames,
lamps and television sets that are not bolted or strapped as discussed in
(a)(i) of this subsection, also do not qualify as components of the building or
structure.
(iii) Purchases of labor
and transportation charges necessary to move and set up mobile homes, mobile
bunkhouses, and other property and component parts as farmworker housing are
exempt from retail sales tax.
(iv)
As a condition for exemption, the seller must take from the buyer an exemption
certificate completed by the buyer to document the exempt nature of the sale.
This requirement may be satisfied by using the department of revenue's
"Farmers' Certificate for Wholesale Purchases and Sales Tax Exemptions " which
can be obtained through the following means:
(A) From the department's internet site at
http://dor.wa.gov;
(B) By calling taxpayer services at
360-705-6705; or
(C) By writing to:
Taxpayer Services
Washington State Department of Revenue
P.O. Box 47478
Olympia, WA 98504-7478
The seller may accept a legible fax or duplicate copy of an
original exemption certificate. In all cases, the exemption certificate must be
retained by the seller for a period of at least five years. An exemption
certificate may be provided for a single purchase or for multiple purchases
over a period of time. If the certificate is provided for multiple purchases
over a period of time, the certificate is valid for as long as the buyer and
seller have a recurring business relationship. A "recurring business
relationship" means at least one sale transaction within a period of 12
consecutive months.
RCW
82.08.050(7)(c). Failure to
comply with the provisions in this section may result in a denial of the
exemption and the agricultural employer may be subject to use tax plus
penalties and interest.
(4)
Requirement to remit payment of tax
if farmworker housing fails to continue to satisfy the conditions of exemption.
(a) Farmworker housing must be used
for that purpose at least five consecutive years from the date the housing is
approved for occupancy to retain the retail sales and use tax exemption. If
this condition is not satisfied, the full amount of tax otherwise due is
immediately due and payable together with interest, but not penalties, from the
date the housing ceases to be used as farmworker housing until the date of
payment.
(b) If at any time
farmworker housing ceases to comply with the state's current building codes for
single-family or multifamily dwellings, the full amount of tax otherwise due is
immediately due and payable with interest, but not penalties, from the date the
housing ceases to be used as farmworker housing until the date of
payment.
Statutory Authority:
RCW
82.32.300,
82.01.060(2),
82.08.02745 and
82.12.02685. 08-14-017, §
458-20-262, filed 6/20/08, effective 7/21/08. Statutory Authority:
RCW
82.32.300 and
82.08.02745. 98-24-069, §
458-20-262, filed 11/30/98, effective
12/31/98.