In the second part of this series, we provided an overview of the sales and use tax exemptions for manufacturing machinery and equipment used directly in a manufacturing or research and development operation under RCW 82.08.02565 and 82.12.02565 (the “M&E” exemption). See Washington’s Taxation of Manufacturing — Part 2: The Sales and Use Tax Exemption for Manufacturing Machinery and Equipment. In general, the M&E exemption applies the purchase and use by a manufacturer or processor for hire of machinery and equipment that is “used directly” in a qualifying “manufacturing operation” or “research and development operation,” as well as machinery and equipment used in “testing” for a manufacturer or processor for hire.

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