Washington State Courts Boeing with Tax Incentives
- Sales Tax News
- Nov 11, 2013 | Gail Cole
During a special session that concluded on November 9, 2013, Washington State lawmakers overwhelmingly approved legislation designed to keep Boeing happy. The hope is that Boeing will commit to building its new 777X jet in the state, which will create jobs.
In brief, ESSB 5952 does the following:
- “Extends the expiration date of aerospace tax incentives to July 1, 2040, upon the siting of a significant commercial airplane manufacturing program in Washington;
- Expands the availability of a sales and use tax exemption for the construction of facilities used to manufacture commercial airplanes;
- Terminates the preferential business and occupation tax rate application to new versions or models of commercial airplanes if final assembly or wing assembly of the new model or version is sited outside the State of Washington; and
- Requires the Joint Legislation Audit and Review Committee to specifically review employment changes in the aerospace industry every five years as part of its tax preference review process.”
EHB 2088 makes supplemental appropriations to the following:
- “… the 2013-15 Operating Budget for aerospace worker education and training and environmental permitting activities related to large aerospace facilities;” and
- “… the 2013-15 Capital Budget related to facilities for aerospace worker education and training.”
Governor Jay Inslee (D), who called the special session, "praised lawmakers for working quickly and in a broad bipartisan fashion to approve key measures" of the legislation. “This is a great day for everyone in Washington. Winning the 777X will secure tens of thousands of jobs and yield huge economic benefits for generations to come. And it will bolster our state’s legacy as the aerospace capital of the world.”
According to an independent analysis released by the office of the governor, production of the 777x “would produce $21 billion in tax revenue for the state over 16 years” (The Seattle Times).
These two bills are a start, but they may not be enough. Boeing also “wants the Machinists union to accept a new eight-year contract with big cuts in future pension and health-care benefits.” The leader of the Machinists union tore up that contract and called it “a piece of crap.”
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