2025 tax preference review: Agricultural Crop Protection Products
25-10 final report | December 2025
Zack Freeman, research analyst
Pete van Moorsel, tax review coordinator; Eric Thomas, legislative auditor
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.
Key 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
The Legislative Auditor makes two 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.
Legislation required: Yes
Fiscal impact: If the Legislature continues the preference, beneficiaries would likely save $655,000 in the 2027-29 biennium.
Implementation date: 2027 legislative session.
Commission recommendation: Endorse without comment (HTML)
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.
Legislation required: Yes
Fiscal impact: None
Implementation date: 2027 legislative session.
Commission recommendation: Endorse without comment (HTML)
Read the full report
Agricultural Crop Protection Products (HTML)