Since our original Washington state legal update related to businesses receiving financial relief under the CARES Act, including but not limited to the federal paycheck protection program (PPP), Washington’s legislature acted and successfully passed legislation to provide taxpayers some relief during the ongoing pandemic. Effective February 19, 2021 and applied retroactively to February 29, 2020, Substitute House Bill 1095 creates three new tax exemption statutes, including:
RCW 82.04.767 (Business & Occupation tax);
RCW 82.08.0209 (Retail Sales Tax); and
RCW 82.16.320 (Public Utility Tax).
The three new statutes provide that the related Washington taxes do not apply to amounts received as a qualifying grant (received on or after February 29, 2020). Qualifying grant is a statutorily defined term. The Department of Revenue summarized “qualifying grant” in an article to mean “government-funded financial assistance given to address the impacts of conditions giving rise to a national emergency or state of emergency, including the COVID-19 pandemic.”
At the time of our prior publication, the Washington Department of Revenue was deferring its decision until it more closely analyzed both the various programs and tax statutes. It expected that its delay would provide an opportunity for the legislature to “clarify applicable statutes.” Thankfully, its delay worked and the legislature was able to act to help the taxpayers doing business in Washington state.
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