2024 Tax Preference Review:
Aerospace
September 2023
Pete van Moorsel, Team
Lead
Stephanie Hoffman,
Project Coordinator | Eric Thomas,
Legislative Auditor
Nine tax preferences benefit Washington’s aerospace industry
| Preference type | Number in this review |
|---|---|
| B&O tax (preferential rate) | 3 |
| Sales and use tax | 2 |
| B&O tax (credits) | 2 |
| Property tax | 1 |
| Leasehold excise tax | 1 |
In 2013, the Legislature extended nine tax preferences that benefit the aerospace industry. The preferences have been available to businesses that perform any of these three activities:
- Manufacturing commercial airplanes, including superefficient airplanes.
- Developing aerospace products. Products include airplanes and their components, airplane repair equipment, and tooling used to manufacture commercial airplanes.
- Repairing aircraft.
Legislature requires JLARC to review the nine tax preferences every five years
The 2013 Legislature required JLARC to review these preferences by December 1, 2019, and every five years thereafter. These preferences also are included in the 10-year review schedule set by the Citizen Commission for the Performance Measurement of Tax Preferences (Commission).
The Legislature requires that each review assess employment changes in Washington’s aerospace industry compared to other states and countries. In the 2019 review, the Legislative Auditor recommended the Legislature clarify its expectations for employment growth in the aerospace industry. The Commission endorsed this recommendation. It has not yet been implemented.
This study will address the following questions
Study questions define the scope of the audit, based on the study mandate. They reflect preliminary outreach, research, and analysis of potential racial equity considerations per RCW 44.28.076.
- Have the preferences and their use changed since JLARC reviewed them in 2019?
- Is the Legislative Auditor’s 2019 recommendation applicable to current circumstances?
- What are the racial and ethnic characteristics of those that benefit from the tax preferences and their employees?
What's next
- Preliminary Report: July 2024
- Proposed Final Report: December 2024
Study team
Pete van Moorsel, Team Lead, (360) 786-5185
Dana Lynn, Research Analyst, (360) 786-5177
Stephanie Hoffman, Project
Coordinator, (360) 786-5297
Eric Thomas, Legislative Auditor,
(360) 786-5182
Washington Joint Legislative Audit & Review Committee   
|
106 11th Avenue SW, Suite 2500 |