The state public utility tax rate for light and power businesses is 3.873 percent. Cities are also authorized to levy a tax on the gross income received by utilities, at a rate not exceeding 6 percent unless city voters approve a higher rate. Under current law, when an instate power generator exports power out of state, revenue from the export is not subject to the public utility tax. The amount of electricity being exported and imported by Washington utilities and large industrial customers has increased in recent years as a result of changes in the wholesale electricity markets and competitive pressures within the retail markets. Under current law, sales and use taxes do not apply to sales for which utilities are taxed under the PUT laws.
Sales tax is imposed on most items of tangible personal property.
A use tax is imposed on the use of an item in this state when the item's acquisition was not subject to sales tax. Use taxes apply to items purchased from sellers who do not collect sales tax, items acquired from out of state, and items produced by the person using the item. The Washington Utilities and Transportation Commission, the Energy Division of the Department of Community, Trade, and Economic Development, and the State Auditor are directed to support DOR in the study and preparation of the report, and all entities subject to current electricity taxes are directed to cooperate in providing data for the study. DOR is directed to consult periodically with the chairs and ranking members of the Senate and House Energy Committees during the course of the study. Ninety days after adjournment of session in which bill is passed.