Until December 31, 2014, the University of Washington was able to take advantage of tax savings on capital projects that housed research activities through the High Tech Tax Deferral program. Although no new applications may be submitted at this time, projects which were previously approved have continuing audit and annual survey requirements.
High Tech Tax Deferral
The High Tech Tax Deferral is an 8 year deferral (which becomes permanent after 8 years) on sales tax associated with construction of new facilities that house the following types of research activities:
- Advanced computing*
- Advanced materials*
- Electronic device technology*
- Environmental technology*
The above activities must meet the Department of Revenue definition of research and development. The deferral applies to the portion of the building directly related to research. An analysis of the building costs and uses must be performed in order to arrive at the proper percentage.
Machinery and Equipment Exemption
The Machinery and Equipment (M&E) Exemption allows the University to purchase research-related equipment tax free. This exemption may also be used for some installation/support costs related to such equipment that might typically be considered part of building costs. For example, special excess-capacity wiring specifically required by the qualifying piece of equipment may also qualify for the M&E exemption. For more information, click here or contact your capital projects manager, Chiaka Amadi in the Capital Projects Office or Aris Gempesaw in the Tax Office.