Hay cubing

From the 2024 DOR Tax Exemption Study

82.04.120(2)(a) - Hay cubing Description Manufacturing excludes cubing hay or alfalfa (compacting hay into small cubes for shipping, mainly to foreign markets) for B&O tax purposes. As a result, farmers who compact their own hay or alfalfa into cubes for sale at wholesale, are not subject to B&O tax. Persons who cube hay or alfalfa for others are subject to the service or wholesaling B&O tax depending on where the activity takes place. Activity taking place on the grower’s land is a service, while activity performed elsewhere is a wholesale transaction. Purpose Improves competitive position of Washington farmers that cube hay for export. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.467 $0.467 $0.467 $0.467 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.428 $0.467 $0.467 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Many variables affect the price of hay, and prices tend