Machinery and Equipment (M&E) Sales Tax Exemption

We are in the process of updating this web site.  Our hope is that it will become easier to navigate and easier to find answers to your questions.  Please let us know if you have any feedback or suggestions to make it better by emailing the Equipment Inventory Office.

Effective October 1, 2004

New! EIO has produced a new video, Machinery & Tax (M&E) Exemption for PIs. This video provides information to researchers on what the purpose is of the M&E Tax Exemption as far as the State of Washington is concerned, what kinds of research - and the work that you're doing in that field - may or may not qualify for the Exemption, and what EIO requires for M&E purchases to be approved. Feel free to share this video with PIs and administrators in your department!


Machinery and Equipment Tax Exemption (M&E Exemption)

Research and Development

Tangible University Property

Used Directly 

Best Practices for M&E Purchases

Since M&E purchases require pre-approval, the only systems in which M&E purchases are allowed are the eProcurement, Non-Catalog, and Blanket Purchase Order (BPO) modules of Ariba. 

A vendor should not allow an M&E purchase to be made without the M&E Certificate presented up front. The Procurement Card and both the Non-PO Invoice and eReimbursement modules of Ariba are "post purchase" payment methods and therefore pre-approval is not available.

Effective 5/1/2009, equipment purchases are not allowed using the Procurement Card.

Effective 11/1/2013, equipment purchases are not allowed using the Non-PO Invoice or eReimbursement modules of Ariba.  M&E object codes will still be visible in these modules, but they should not be selected.  If M&E codes are used, the order will be rejected to the department.  Eventually, the M&E codes will be completely removed from these two modules of Ariba to eliminate confusion.  However, due to programming efforts and competing priorities, this will be a future phase.

General Overview

To qualify for the M&E Exemption, equipment must:

  • Have a useful life of one year or more;
  • Be used more than 50% annually on qualifying research; and
  • Have an acquisition cost of $200 or more
  • Note:  Federally titled items purchased by the University also qualify for the exemption.
  • Note:  Add costs to existing pieces of M&E qualifying equipment can also qualify for the exemption, even if they are under $200.

Non-equipment costs that can also qualify for the M&E Exemption include:

  • Ancillary costs (use the relevant 06-XX M&E object code)
  • Labor costs (use object code 05-41)
  • Repair and maintenance, including preventative maintenance costs performed outside of any maintenance contract (use object code 05-41)
  • Replacement parts (use object code 05-41)

Non-equipment costs that do not qualify for the M&E Exemption include:

  • Extended warranties and maintenance agreements
  • Consumable supplies


This provides guidance as to what each of the below departments are responsible related to M&E process:

  • Principal Investigator and Department
  • Equipment Inventory
  • Procurement Services
  • Tax Office


This provides detailed guidance for completing an M&E order under each purchasing method:

M&E Statement Examples

This gives examples of both acceptable and unacceptable statements.

Our video, The Machinery & Equipment Tax Exemption for PIs, may help investigators understand what we are looking for in an M&E Statement, and why.

Qualifying Research Programs

This describes programs that will often qualify for the M&E Exemption as well as those that do not qualify for the M&E Exemption.

M&E Equipment Examples

This gives examples of equipment that has and has not qualified for the M&E Exemption.

M&E Object Codes

This lists and describes the various M&E Object Codes.

M&E Recharge Center Guidance

This provides guidance specific to recharge centers who purchase equipment under the M&E Exemption.


eProcurement - Required Manufacturer's Sales and Use Tax Exemption Certificate

Optional - Some departments choose to collect supporting data related to M&E purchases.  The format for this varies by department and is for internal use only.


RCW 82.08.02565 Exemptions - Sales of machinery and equipment for manufacturing, research and development, or a testing operation - Labor and services for installation - Exemption certificate - Rules.

RCW 82.63.010 Definitions

WAC 458-20-13601 Manufacturers and processors for hireSales and use tax exemption for machinery and equipment.

Excise Tax Advisory 3127.2009 Manuracturers' Machinery and Equipment Exemption - Research and Development


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