Signed by Governor Jay Inslee

Vote Smart's Synopsis:

Vote to amend and pass a bill that reduces the business and occupation tax preference for aerospace manufacturers.

Highlights:

• Increases the tax percentage multiplied to the value, in the case of manufacturers, equal to the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, equal to the gross income of the business, to 0.484 percent beginning April 1, 2020, for (Sec. 3):

• Every person engaged in the business of manufacturing commercial airplanes, or components of such airplanes, or making sales, at retail or wholesale, of commercial airplanes or components of such airplanes, manufactured by the seller; and

• Every person engaged in the business of manufacturing tooling specifically designed for use in manufacturing commercial airplanes or components of such airplanes, or making sales, at retail or wholesale, of such tooling manufactured by the seller (Sec. 3).

• Requires the tax rates highlighted above to be reduced to 0.357 percent after March 31, 2021, if the following conditions are met (Secs. 2 & 3):

• The department of commerce verifies with the United States trade representative that the United States and the Europeans Union have entered into a written agreement that resolves any world trade organization disputes involving large civil aircraft;

• Such agreement expressly allows a business and occupation tax rate reduction for commercial airplane manufacturers to 0.357 percent or less;

• The department of commerce notifies the department in writing that the aforementioned conditions are met and provides a copy of the agreement between the United States and the European Union or other document providing for the business and occupation tax rate reduction to the department;

• The department of labor and industries notifies the department in writing that a significant commercial airplane manufacturer has at least a three-tenths of one percent aerospace apprenticeship utilization rate of its qualified apprenticeable workforce in Washington;

• Within 30 days of receiving the last of these written notices, the department must provide written notice to the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department, that the tax rates are reduced to 0.357 percent and the effective date of the rate reduction; and

• Any rate reduction to 0.357 percent pursuant to this section must occur on the first day of the next calendar quarter that is at least 60 days after the department receives the last of the written notices.

• Specifies that a significant commercial airplane manufacturer receiving the 0.357 rate, and the aerospace industry in Washington in general, are subject to an aerospace apprenticeship utilization rate of one and five-tenths percent of its qualified apprenticeable workforce in Washington by July 1, 2026, or 5 years after the effective date of the 0.357 percent rate, whichever is later (Sec. 4).

• Establishes an aerospace workforce council in the department of labor and industries for establishing a framework for apprenticeship utilization reporting to establish efficient pathways to achieve targets required in the aforementioned highlight (Sec. 5).

Full Bill Text