On November 4, 2022, the Washington Department of Revenue adopted WAC 458-20-290, a regulation explaining the state’s workforce education investment surcharge on select advanced computing businesses. The regulation defines a select advanced computing business as “a person who is a member of an affiliated group with at least one member of the affiliated group engaging in the business of advanced computing, and the affiliated group had worldwide gross revenue of more than $25,000,000,000 during the immediately preceding calendar year.” Such businesses must report and pay the 1.22 percent surcharge on a quarterly basis, with the report due on the last day of the month following the end of the quarter.
The surcharge does not apply to hospitals and provider clinics and their affiliated organizations, or a business primarily engaged as a(n):
- Financial institution;
- Owner (or lessor) and operator of transmission facilities and infrastructure for the transmission of voice, data, text, sound, and video using wired telecommunications networks; or
- Commercial mobile service provider.
Notably, the regulation imposes a requirement on businesses believed to be engaging in advanced computing, or affiliated with such a business, to disclose whether they are a member of an affiliated group and, if so, to identify all other members of the affiliated group. The regulation also imposes a 50 percent evasion penalty for those members of an affiliated group that intentionally fail to comply with the surcharge.