M&E equipment used in a recharge center is a little more involved than basic M&E equipment purchases since the details of the research are uncertain up front. Here are a couple of recommendations related to recharge center M&E equipment purchases:
- Since the details of the research are uncertain up front, departments may use a "generic" M&E statement when purchasing this equipment. Here's a recommended statement for these types of purchases:
This item will be used for qualifying research, as described in the public research machinery and equipment tax exemption rule, in a recharge center. The recharge center will maintain documentation regarding specific research and percentage use to ensure that equipment is used 50% annually on qualifying research. The department acknowledges that in the event of a tax audit, they may be required to present this documentation.
- Equipment Inventory recommends departments track the usage of equipment used in a recharge center in more detail than general M&E equipment purchases. A sample Equipment Usage Template has been created for departments to use as a starting point. This template is designed as a suggested guide to the information and amount of detail you should be tracking to support an audit by the Department of Revenue. This is only an example and by no means ensures that an audit will be in the favor of the University of Washington.
- "Majority use" of an item during a calendar year can be determined using any of the methods outlined in Section (9) The majority use threshold of WAC 458-20-13601 Manufacturers and processors for hire—Sales and use tax exemption for machinery and equipment.