Complete information for each of the following tax incentives is provided by the Washington State Department of Revenue. Visit their tax incentives webpage to download fact sheets with further details on these and other industry specific tax incentives.
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Manufacturers' Sales/Use Tax Exemption
Exemption on sales/use tax on machinery and equipment used directly in manufacturing or research (for manufacturers, processors who perform R&D).
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Aerospace Industry B&O Rate Decrease
B&O tax rate decrease to .4325% for manufacturers of commercial airplanes or component parts of commercial airplanes.
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Aerospace Industry B&O Tax Credit for Preproduction Development Expenditures
B&O tax credit for qualified expenditures in research, design and engineering activities related to the development of aerospace products or models by manufacturers of commercial airplanes or component parts of commercial airplanes. The B&O tax credit is equal to 1.5% of qualified preproduction development expenditures.
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Aerospace Industry B&O Tax Credit for Property Taxes Paid
B&O tax credit equal to the property taxes paid on new buildings, the land upon which the new building are located; and property taxes attributable to the renovation or expansion of buildings used exclusively in the manufacturing of commercial airplanes or component parts of commercial airplanes.
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Aerospace Industry Sales/Use Tax Exemption for Computers
Sales/use tax exemption for manufacturers of commercial airplanes or component parts of commercial airplanes on computer hardware, software and computer peripherals used primarily in the development, design and engineering of such products.
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High Technology B&O Tax Credit
B&O tax credit for businesses that do R&D under specific technology categories (advanced computing, advanced materials, biotech, electronic device, environmental technology). The credit is taken against a business's state B&O tax. The rate is 1.5% for businesses, and is applied to R&D related expenses.
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High Technology Sales/Use Tax Deferral
Deferral of sales/use taxes if a businesses uses the investment project for qualified R&D. To be eligible, a business must start new R&D or pilot manufacturing operations or expand/diversify a current operation by expanding, renovating, or equipping an existing facility. The investment must consist of machinery and equipment, new structures, and/or expansion or renovation to increase floor space or production capacity.
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Timber Activities/Wood products industry B&O Rate Decrease
B&O tax rate decrease to .4235% for timber harvesting and certain manufacturing/processing activities.
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Rural County Sales/Use Tax Deferral Program
Deferral of sales/use tax for manufacturing, R&D or computer-related businesses locating in Pierce County on the sales/use taxes on qualified construction and equipment expenditures. The business must invest in facility construction, expansion, or machinery. In addition, at least one qualified employment position (i.e., filled by someone residing in the Community Empowerment Zone) must be created for every $750,000 of investment on which a deferral is requested.
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Warehouse Tax Incentive
Exemption from the state's portion of the sales/use tax paid on new warehouse construction or expansion that is 200,000 square feet or greater.
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B&O Tax Credit and Training Assistance for New and Expanding Businesses
A revolving loan fund under the new Washington Customized Training Program that covers businesses' up-front training costs and provides a 50 percent business and occupation (B&O) Tax credit to businesses locating or expanding in Washington State.
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Farm Machinery and Equipment Replacement Parts - Sales and Use Tax Exemption
Eligible farmers may purchase replacement parts for farm machinery and equipment without paying retail sales tax, starting July 1, 2006. Farmers must apply to the Department of Revenue for an exemption certificate.
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