Washington Legislature Authorizes Sales Tax Exemption for Affordable Housing Conversion Projects

Among the raft of recent legislation to encourage the production of affordable housing, SB 6175 authorizes Washington cities to provide a sales and use tax deferral for projects that would convert existing buildings on underutilized commercial land to multi-family projects with at least 10 percent affordable housing units. The legislation permits cities to adopt such programs through a formal resolution, including requirements for application, review, and grant of tax deferrals through city and State Department of Revenue processes which will include appeal rights. Granted sales and use tax deferrals generally become permanent exemptions if the project is used for qualifying purposes for 10 years.

Given the significant benefit that this program could bring to housing conversion projects, members of the development community are already advocating at the local level to ensure that this tax deferral is promptly adopted by Washington cities. The full text of this recent legislation should be consulted for its specific requirements.

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