2025 tax preference review: Agricultural Crop Protection Products
December 2025
25-10 final report
Zack Freeman, research analyst
Pete van Moorsel, tax review coordinator; Eric Thomas, legislative auditor
Contact information
Legislative auditor's conclusion
Total hazardous substance tax revenue increased as intended. However, other performance metrics would more accurately reflect the preference's effect and inform the Legislature.
Read the full reportKey points
- The preference is for businesses that store agricultural crop protection products (pesticides) that are later sold out of state.
- Eight distinct businesses claimed the preference, saving a combined average of $168,000 per fiscal year (2020 through 2024). This is similar to the 2023 review.
- The preference improves industry competitiveness by offering tax relief. This finding is unchanged from JLARC's 2023 review.
- The statutory performance metric is to increase statewide hazardous substance tax (HST) revenue.
- The metric is not useful for evaluating the preference because beneficiaries contribute just 0.2% of total HST revenue.
Legislative auditor’s recommendations
Recommendation #1
The Legislature should extend the preference's January 1, 2028 expiration date.
The preference improves industry competitiveness by providing tax relief to Washington businesses that store or transport pesticides sold out of state.
If the Legislature continues the preference, beneficiaries would likely save $655,000 in the 2027-29 biennium.
027 legislative session.
Recommendation #2
The Legislature should either consider new metrics to evaluate the preference or recategorize the preference as one intended to provide tax relief.
The Legislature may wish to consider alternative metrics to better evaluate effect of the preference on its stated public policy objectives. Alternatives could include:
- The amount of agricultural pesticides stored in Washington.
- The number of beneficiaries and/or beneficiary savings.
- Value-based HST paid by beneficiaries.
- Statewide value-based HST revenue.
If the preference were categorized as one intended to provide tax relief, then future reviews would consider only whether the preference provided tax savings to eligible beneficiaries.
None
2027 legislative session.
Read an overview
Read the agency response
Legislative mandate