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Washington Sales Tax and its Hog Fuel Rule

  • Dec 29, 2015 | Suzanne Kearns

If you use hog fuel to produce electricity, steam, heat, or biofuel, then you should know about a special Washington sales tax exemption that has been recently renewed. The sales and use tax exemption was due to expire on June 30, 2013, but the state’s legislature extended the exemptions until June 30, 2024. Here’s what you need to know.

What is Hog Fuel?

Despite its funny name, hog fuel does not come from an animal. It’s a wood residue that comes from wood, bark, sawdust, planer shavings, and forest-derived biomass. According to the Washington sales tax rule, hog fuel does not include firewood or wood pellets.

If You Sell Hog Fuel

The Washington State Department of Revenue has some specific requirements for sellers of hog fuel. First, you’ll need to obtain a Buyer’s Retail Sales Tax Exemption Certificate from the buyer. Next, the state asks you to report the transaction under the Retailing B&O tax as well as the Retail Sales Tax on your E-file.

If You Purchase Hog Fuel

In order to get the WA sales tax exemption for hog fuel, you will need to electronically file an Annual Tax Incentive Survey every year with the Department. The survey is due on April 30 the year after the exemption was claimed.

In addition, you will need to provide the seller with a Buyer’s Retail Sales Tax Exemption Certificate in order to qualify for the tax-free sale.

Possible WA Sales Tax Exemption for Hog Fuel Issues

It’s important to note that if you claim the exemption and close a facility that results in a loss of jobs in the State of Washington, there will be penalties. The Department will assess you taxes that are equal to the exempted amount for the previous two calendar years.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Suzanne Kearns
Avalara Author Suzanne Kearns