Baumgartner delivers tax relief for small manufacturers

After a dedicated push by Sen. Michael Baumgartner, R-Spokane, small manufacturers in Washington will finally be getting a break. A reduction of the tax rate for all manufacturers to the special rate applied to Boeing passed Friday as a part of the final state budget.

“This is a win for the little guys,” said Baumgartner, chair of the Senate Commerce, Labor and Sports Committee. “It’s not complicated that lower tax rates keep businesses in the state and encourage others to move here. If a lower tax rate is good for Boeing, then it’s only fair that we give that same opportunity to the little guys.”

Under a deal struck with the Legislature in 2003 and extended in 2013, Boeing pays a tax rate that is 40 percent lower than other manufacturers. Senate Bill 5977 passed on Friday to extend that same tax rate to all manufacturers in Washington, a concept introduced by Baumgartner earlier in the legislative session with Senate Bill 5888.

Since 2000, Washington lost 51,000 manufacturing jobs.

“Manufacturing provides good, family-wage jobs for a lot of Washingtonians, but we’re losing those jobs to other states and countries with more competitive tax rates,” said Baumgartner. “This change will stop the bleeding and start turning the corner back to a growing and strong manufacturing economy.”

The tax rate reduction would be phased in over four years, with the final “Boeing rate” of 0.2904 achieved by 2022.

Previous studies determined that the special rate for Boeing provided $4.10 in total state revenue for every $1 provided in tax incentives.