Interstate transportation equipment

From the 2024 DOR Tax Exemption Study

82.08.0262; 82.12.0254(1) - Interstate transportation equipment Description Sales tax and use tax does not apply to sales or use of: - Airplanes, locomotives, railroad cars, or watercraft for use in conducting interstate commerce. - Vessels for conducting commercial deep-sea fishing outside the territorial waters of the state. - Component parts for such equipment. - Labor and services for constructing, repairing, cleaning, altering, and improving such equipment. Purpose To give a competitive advantage to Washington-based transportation manufacturing industries to retain high-wage, skilled manufacturing jobs. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $9.373 $8.952 $8.989 $9.103 Local Taxes $4.215 $4.282 $4.300 $4.355 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.000 $0.000 $0.000 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - A challenge under federal commerce laws would likely occur if this exemption was repealed, which results in no revenue impact. Data Sources - Department of Revenue, Excise tax data - S