An artist’s rendering of a Boeing 777X. Building the plane in Washington earned the company tax breaks. The company is building it in Everett, and its first flight is expected by the end of the year. (Boeing Co.)

An artist’s rendering of a Boeing 777X. Building the plane in Washington earned the company tax breaks. The company is building it in Everett, and its first flight is expected by the end of the year. (Boeing Co.)

Annual disclosure: Tax breaks saved Boeing $230M in 2018

The company again took advantage of tax reductions enacted by the Legislature for aerospace companies.

EVERETT — The Boeing Co. slashed its state tax bill last year by $230 million dollars, taking advantage of multiple breaks available to Washington’s aerospace industry.

The aerospace giant recently disclosed its 2018 tax savings in an annual filing with the state Department of Revenue. Boeing and other aerospace firms are required to tell the state how much they save from each tax break.

On the other side of the coin, Boeing invested $14 billion in Washington state last year, the company said.

“The $14 billion Boeing spent in Washington last year reaffirms Boeing’s deep investment in Washington and in our future here,” said Bill McSherry, vice president of government operations for Boeing Commercial Airplanes, said in an email.

Boeing’s 2018 tax savings of $230 million was on par with the $227 million it saved in 2017 but was less than the $242 million tax break it reported for 2016.

The savings stem from a suite of aerospace tax breaks the Legislature approved in 2003. Lawmakers broadened and extended those incentives in 2013 as part of an effort to convince Boeing to assemble the 777X here. The company is building it in Everett, and its first flight is expected by the end of the year.

One of the more generous tax breaks allows Boeing and other eligible aerospace firms to deduct 40% from the business and occupation tax owed the state.

That discount alone allowed Boeing to lop $99 million off its 2018 tax bill. At the full tax rate, which is levied on a company’s annual gross receipts, the amount calculates to about $247 million.

The discount has been a source of contention with rival Airbus, with a World Trade Organization body ruling it illegal this spring.

Boeing also claimed $113 million last year in tax credits related to its business and operations tax liability — a $67 million reduction for pre-production research and development and a $46 million property tax credit.

Boeing is the state’s largest private employer.

“Nearly half of our employees call Washington home, and our commitment to this region is evident through these deep investments in education, employees, infrastructure and innovation,” McSherry said.

In 2018, it employed nearly 70,000 workers in Washington. Companywide, it employed about 150,000 workers, according to information Boeing provided in January.

Most of Boeing’s in-state spending last year was in the form of salaries and wages, and purchases from local suppliers.

The jet maker paid $8.5 billion in wages and $5 billion to local suppliers. Its sizable footprint in Washington also includes $600 million in capital investments, $50 million in community contributions and $31 million for tuition and other fees for Boeing employees who attended school.

In 2018, Boeing hired 8,500 new workers in the state. Factoring in retirements and departures, that was a net increase of 3,984 employees, the Choose Washington Council reported in February.

Boeing plants in Renton and Everett delivered 741 aircraft in 2018, the council reported.

Janice Podsada; jpodsada@heraldnet.com; 425-339-3097; Twitter@JanicePods

Department of Revenue filing by Boeing:

• Business and occupation tax rate reduction: $99 million

• B&O pre-production research and development credit: $67 million

• B&O property tax credit: $46 million

• Sales and use new construction: $5 million

• Sales and use computing: $7 million

• Sales and use data center: $6 million

Total: $230 million

Boeing says it invested $14 billion in Washington in 2018:

• $8.5 billion in payroll.

• $5 billion on Washington suppliers.

• $600 million in capital investments.

• $50 million from Boeing, employees and retirees to community organizations.

• $31 million in education benefits.

• Hundreds of millions in state and local taxes.

Total: $14 billion

Talk to us

More in Herald Business Journal

A man walks by Pfizer headquarters, Friday, Feb. 5, 2021, in New York. Pfizer will spend about $43 billion to buy Seagen and broaden its reach into cancer treatments, the pharmaceutical giant said Monday, March 13, 2023. (AP Photo / Mark Lennihan, File)
Pharmaceutical giant Pfizer to acquire Bothell-based Seagen

Pfizer announced Monday it plans to acquire Seagen in an all-cash deal for $43 billion.

Lacie Marsh-Carroll stirs wax before pouring candles in her garage at her home on March 17, 2018 in Lake Stevens. (Kevin Clark / The Daily Herald)
Women business owners in Snohomish, Island counties make their mark

In honor of Women’s History Month, we spotlight three local business owners.

x
Edmonds International Women’s Day takes place Saturday

The Edmonds gathering celebrates women and diversity with this year’s theme, “EmbraceEquity.”

Owner and CEO Lacie Carroll holds a “Warr;or” candle at the Malicious Women Candle Co workspace in Snohomish, Washington on Wednesday, Feb. 15, 2023. The business is women run and owned. (Annie Barker / The Herald)
Malicious Women Co: She turned Crock-Pot candles into a sassy venture

Lacie Marsh-Carroll is rekindling her Snohomish candle company with new designs and products.

Kelly Matthews, 36, left, Tonka, 6, center, and Nichole Matthews, 36, pose for a photo in their home in Lynnwood, Washington on Thursday, Feb. 2, 2023.  The twin sisters work as freelance comic book artists and illustrators. (Annie Barker / The Herald)
Drawing interest: Twin sisters never gave up on making their mark

Lynnwood sisters, Kelly and Nichole Matthews, got their big break a decade ago and now draw comics full time.

Willow Mietus, 50, poses for a photo at her home in Coupeville, Washington on Wednesday, Feb. 1, 2023. Mietus bought a former Frito-Lay truck to sell her dyed yarn out of. She calls it "The Wool Wagon." (Annie Barker / The Herald)
The Wool Wagon to hit the streets of Whidbey Island

A self-described “professional yarn temptress” from Coupeville is setting up shop in a modified truck.

IonQ will open a new quantum computing manufacturing and research center at 3755 Monte Villa Parkway in Bothell. (Photo courtesy of IonQ)
Quantum computing firm IonQ to open Bothell R&D center

IonQ says quantum computing systems are key to addressing climate change, energy and transportation.

Nathanael Engen, founder of Black Forest Mushrooms, sits in the lobby of Think Tank Cowork with his 9-year-old dog, Bruce Wayne, on Friday, Jan. 27, 2023, in downtown Everett, Washington. (Ryan Berry / The Herald)
Growing green mushrooms in downtown Everett

The founder of Black Forest Mushrooms plans to grow gourmet mushrooms locally, reducing their carbon footprint.

Barb Lamoureux, 78, poses for a photo at her office at 1904 Wetmore Ave in Everett, Washington on Monday, Jan. 23, 2023. Lamoureux, who founded Lamoureux Real Estate in 2004, is retiring after 33 years. (Annie Barker / The Herald)
Barb Lamoureux, ‘North Everett’s Real Estate Agent’ retires

A longtime supporter of Housing Hope, Lamoureux helped launch the Windermere Foundation Golf Tournament.

Bothell
AGC Biologics in Bothell to produce new diabetes treatment

The contract drug manufacturer paired with drug developer Provention Bio to bring the new therapy to market.

The Walmart Store on 11400 Highway 99 on March 21, 2023 in in Everett, Washington. The retail giant will close the store on April 21, 2023. (Janice Podsada / The Herald)
Walmart announces Everett store on Highway 99 will close on April 21

The Arkansas-based retail giant said the 20-year-old Walmart location was “underperforming financially.”

Everett Memorial Stadium and Funko Field on Wednesday, Sept. 2, 2020 in Everett, Washington. (Olivia Vanni / The Herald)
Drive to build new AquaSox ballpark gets $7.4M boost from state

The proposed Senate capital budget contains critical seed money for the city-led project likely to get matched by the House.