Use tax on rental value

From the 2024 DOR Tax Exemption Study

82.12.010(7)(c) - Use tax on rental value Description An out-of-state business that brings property into Washington for temporary business use (less than 180 days during a 365 consecutive day period) may compute use tax based on an amount representing the reasonable rental value of the item, rather than the total market value. The usual measure of use tax is the purchase price or the fair market value at the time of first use in Washington. Purpose To encourage out-of-state enterprises to do business in Washington by allowing them to use equipment here on a temporary basis without incurring use tax on the full market value. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $1.159 $1.185 $1.227 $1.271 Local Taxes $0.521 $0.533 $0.552 $0.572 Repeal of Repealing this tax preference would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $1.086 $1.227 $1.271 Local Taxes $0.000 $0.489 $0.552 $0.572 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - 90 days is the average use in Washington. - Growth rate mirrors