To qualify for the M&E Exemption, equipment must:
- Federally titled items purchased by the University also qualify for the exemption.
- Add costs to existing pieces of M&E qualifying equipment can also qualify for the exemption, even if they are under $200.
- 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
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 03-65)
- Repair and maintenance - this includes service/maintenance constracts, as well as preventative maintenance costs performed outside of any maintenance contract (use object code 03-65)
- Replacement parts (use object code 05-41)
Non-equipment costs that do not qualify for the M&E Exemption include:
- Consumable supplies
- 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 Ariba requisitions (including non-catalog orders), and BPOs (blanket purchase orders).
The vendor must obtain the M&E DOR certificate up front by accepting the purchase order. In addition, the vendor should not allow an M&E purchase to be made without the certificate being presented up front. The Procurement Card, Non-PO Invoices, and eReimbursement are all "post purchase" payment methods and therefore pre-approval is not available.
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 hire—Sales and use tax exemption for machinery and equipment.
Excise Tax Advisory 3127.2009 Manuracturers' Machinery and Equipment Exemption - Research and Development
WAC 450-20-257 Warranties, Service Contracts, & Tax Exempt Status
Updated 26 July 2019