Too often, tax preferences are portrayed simply as "breaks" that give certain industries and/or companies special (possibly unfair) treatment. But as our report shows, these preferences play a crucial role in keeping Washington competitive with other states for jobs and economic activity that could very easily go elsewhere.
Here are some highlights of our report:
- The state and local tax burden, and the types of taxes paid, are key factors of business success.
- In Washington, businesses pay 58 percent of state and local taxes; the national average is 44 percent.
- Washington state ranks sixth highest in business taxes per-employee.
- Our Business & Occupation (B&O) tax raises more per employee than most other states raise through income taxes on business profits.
- Our state business taxes rank high, but adjustments to the tax code mitigate their impact.
- Business tax adjustments are called “preferences” but often exist to create fairness, not favors, and to protect existing Washington jobs or to attract new ones.
- Many competitor states reduce corporate income taxes on out-of-state sales.
- Research and Development tax incentives can have spillover effects benefiting the general public.
- Sales tax exemptions for new data centers have boosted overall tax collections in rural communities.
- Tax preferences have secured our region’s commercial aerospace leadership for decades.
- The many national firms that started in Washington state attest to a success formula which includes a tax code that, while imperfect, nonetheless fosters business and job creation.
Click here to read the full report.