Principal Investigator and Department should:

  • Ensure that all criteria for the exemption are met.  if an exemption is taken on an item that is later deemed by the Washington State Department of revenue to not qualify, the department will ultimately be required to pay the tax along with penalties and fines.
  • Submit the purchase requesition using the correct worktag.  The exemption will only be taken on items with:
    • Proper M&E worktag (Financial Treatment: Machinery and Equipment Tax Exempt (FT003)).
    • A sufficient M&E statement detailing the type of research to be performed and the desired outcome. 
    • A completed Department of Revenue (DOR) M&E Tax Exempt certificate, marked 'External', for the supplier's records.

  • Workday:

  1. On each goods line where you believe the M&E exemption applies, add the worktag:  Financial Treatment: Machinery and Equipment Tax Exempt (FT003) to the "Additional Worktags" section.

  2. Add an M&E research statement to the memo field of each goods line, providing a brief description of the type of research being done, and the hoped-for development outcome.
  3. Attach a current M&E Department of Revenue certificate for manufacturing machinery and equipment to your requisition, entering the Vendor name, and the current date in the lower right-hand corner of page 1. Be sure to mark the document "External = Yes" so that it is visible to the supplier.

    The addition of the FT003 worktag will route your requisition to a Business Asset Tracking Specialist in the Equipment Inventory Office; they will review your order and confirm the items being purchased qualify for the M&E exemption.

  • Procurement Card: M&E purchases cannot be made on the Procurement Card.  M&E purchases require prior approval from EIO; this option does not allow for prior approval.

Note: If during the useful life of the asset, it is determined it will not be used 50% or more on qualifying research, the department will be required to pay the tax due.

Equipment Inventory should:

  • Review and approve requisitions for worktags,DOR certificate, and M&E statement in the memo section.
  • Respond to vendor questions regarding allowable exceptions.
  • Assist department in applying the M&E Exemption.

Procurement Services should:

  • Place orders.
  • Work with vendor to ensure tax is not included on invoices with purchases qualifying for the M&E Exemption.
  • Review the M&E Exemption when paying the invoice.
  • Deduct the tax from payment to vendor where appropriate.

Tax Office should:

  • Review and approve requisitions and M&E statement in the comments section of Ariba purchases.
  • Respond to vendor questions regarding allowable exceptions.
  • Assist department in applying the M&E Exemption.
  • Place orders.
  • Work with vendor to ensure tax is not included on invoices with purchases qualifying for the M&E Exemption.
  • Review the M&E Exemption when paying the invoice.
  • Deduct the tax from payment to vendor where appropriate.
  • Assist Equipment Inventory in applying the M&E Exemption.
  • Research unique purchases over $100,000.