Proposed Study Questions

 

2024 Tax Preference Review:

Aluminum

September 2023

Eric Whitaker, Team Lead
Stephanie Hoffman, Project Coordinator | Eric Thomas, Legislative Auditor

JLARC to review eight tax preferences that are available to businesses involved with aluminum manufacturing

Aluminum smelters and related businesses may be eligible for certain tax preferences. JLARC reviewed six of the preferences in 2015, and several will expire in 2027. Since our last review, many of the activities eligible for the preferences no longer take place in Washington due to the closure of the smelters in Wenatchee and Ferndale.

Business type Preferences Past JLARC review Expiration Stated public policy objective
Aluminum smelters
  1. Reduced business and occupation (B&O) tax rate for manufacturing and wholesaling
  2. B&O credit for property taxes paid
  3. Brokered natural gas tax exemption
  4. Sales and use tax exemption for materials incorporated into facilities
 2015

(report)

 January 2027 Preserve jobs in Washington's aluminum manufacturing industry
Entities that sell power to aluminum smelters
  1. B&O credit for entities that are not utilities
  2. Public utility tax (PUT) credit for utilities
 2015

(report)

 None None
Businesses engaged in aluminum production
  1. B&O tax exclusion for aluminum master alloy producers
  2. Sales and use tax exemption for purchases of anodes and cathodes
 None None None

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.

  1. To what extent have the preferences been used since JLARC’s 2015 review? How much have beneficiaries saved?

  2. How has employment in Washington’s aluminum manufacturing industry changed?

    a. What are the racial and ethnic characteristics of those that benefit from the preferences and their employees?

  3. What local, national, and international factors may have contributed to changes in Washington’s aluminum manufacturing industry?

What's next

  • Preliminary Report: July 2024
  • Proposed Final Report: December 2024

Study team

Eric Whitaker, Team Lead, (360) 786-5618
Geoffrey Cunningham, Research Analyst, (360) 786-5672
Stephanie Hoffman, Project Coordinator, (360) 786-5297
Eric Thomas, Legislative Auditor, (360) 786-5182

Washington Joint Legislative Audit & Review Committee
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106 11th Avenue SW, Suite 2500
PO Box 40910
Olympia, WA 98504-0910
Phone: (360) 786-5171
Email: JLARC@leg.wa.gov