Medical equipment sales tax

AN ACT Relating to a sales and use tax exemption for the purchase 1
and use of medical equipment and supplies by a critical access 2
hospital; adding a new section to chapter 82.08 RCW; adding a new 3
section to chapter 82.12 RCW; creating a new section; and providing 4
expiration dates. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. A new section is added to chapter 82.08 7
RCW to read as follows: 8
(1) Beginning January 1, 2026, the tax levied by RCW 82.08.020 9
does not apply to sales of medical equipment and medical supplies to 10
a critical access hospital. 11
(2) The exemption in this section does not apply to the sale of 12
construction materials, office equipment, building equipment, 13
administrative supplies, or vehicles used for purposes other than 14
patient transportation. 15
(3) The department may adopt rules necessary to implement this 16
section and must electronically publish a list of qualifying medical 17
equipment and medical supplies. 18
(4) For purposes of this section, the following definitions 19
apply: 20
H-0414.1
HOUSE BILL 1277
State of Washington 69th Legislature 2025 Regular Session
By Representatives Shavers and Reed
Read first time 01/14/25. Referred to Committee on Finance.
p. 1 HB 1277
(a) "Critical access hospital" means a public hospital located on 1
an island within 25 miles of a military installation with a critical 2
access designation provided by the centers for medicare and medicaid 3
services. 4
(b) "Medical equipment" means instruments, apparatuses, and 5
machines used in the prevention, diagnosis, or treatment of human 6
illness or disease, or for detecting, measuring, restoring, 7
correcting, or modifying the structure or function of the human body 8
for health purposes. 9
(c) "Medical supplies" means consumable, expendable, disposable, 10
or nondurable items used for the treatment or diagnosis of a human 11
patient's specific illness, injury, or condition. "Medical supplies" 12
includes gloves, gauze, syringes, needles, dressings, 13
pharmaceuticals, bandages, and catheters. 14
(5) This section expires January 1, 2036. 15
NEW SECTION. Sec. 2. A new section is added to chapter 82.12 16
RCW to read as follows: 17
(1) Beginning January 1, 2026, this chapter does not apply to the 18
use of medical equipment and medical supplies by a critical access 19
hospital. 20
(2) The definitions, conditions, and requirements of section 1 of 21
this act apply to this section. 22
(3) This section expires January 1, 2036. 23
NEW SECTION. Sec. 3. This section is the tax preference 24
performance statement for the tax preference contained in sections 1 25
and 2, chapter . . ., Laws of 2025 (sections 1 and 2 of this act). 26
This performance statement is only intended to be used for subsequent 27
evaluation of the tax preference. It is not intended to create a 28
private right of action by any party or be used to determine 29
eligibility for preferential tax treatment.30
(1) The legislature categorizes this tax preference as one 31
intended to provide tax relief for certain businesses or individuals, 32
as indicated in RCW 82.32.808(2)(e). 33
(2) It is the legislature's specific public policy objective to 34
reduce the sales and use tax burden on critical access hospitals 35
located on an island by eliminating the payment of tax on the 36
purchase of medical equipment and supplies used by the hospital.37
p. 2 HB 1277
(3) If a review finds the actual fiscal cost of this tax 1
preference has not exceeded the estimated cost in the fiscal note by 2
more than five percent in any of the initial three biennia, then the 3
legislature intends to extend the expiration date of the tax 4
preference. 5
(4) In order to obtain the data necessary to perform the review 6
in subsection (3) of this section, the joint legislative audit and 7
review committee may refer to any data and relevant taxpayer 8
information collected by the state. 9
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p. 3 HB 1277