OLYMPIA — Boeing and hundreds of other aerospace firms in Washington will have to publicly disclose savings from some of their biggest tax breaks by early May.
The state Department of Revenue reversed its previous decision on the issue, which said the companies would not have to reveal their tax savings for a decade, The Seattle Times reported.
The Times had challenged the tax agency’s interpretation of a tax-incentive transparency law passed in 2013. In a letter sent to the newspaper this week, the agency’s assistant director of taxpayer services said it reconsidered the Times’ appeal and will require disclosures beginning this year. The department said it has notified Boeing and other aerospace firms that they must disclose their benefits for 2014 and 2015 by early May. Similar filings will then be required annually.
In a 2013 special session, the state Legislature approved a suite of tax incentives aimed at Boeing and the aerospace sector. They were meant to ensure that the 777X was assembled in Everett.
Most of the tax breaks were first approved in 2003 and set to expire in 2024, but the new legislation extended them until 2040. Washington’s aerospace industry is expected to save $8.7 billion during that 16 year period. That makes it the largest state tax benefit in the nation’s history.
As the state’s biggest aerospace company — and largest private employer — Boeing will greatly benefit from the tax breaks. In 2012, it provided just over three of every four aerospace manufacturing jobs in the state, according to a state-commissioned study.
That same year, Boeing accounted for 95 percent of the aerospace industry’s $51.2 billion sales revenue, according to the study.
Boeing said Thursday that Washington’s aerospace tax incentives have been a success.
“Any objective analysis will show that these incentives have generated hundreds of millions of dollars in taxes to the state while providing economic opportunities and improving quality of life for hundreds of thousands of Washington residents,” said a statement provided by spokeswoman Deborah Feldman. “We look forward to an open discussion of their value.”
Last month, the company disclosed that in 2014 it saved $19,586,512 on sales tax for construction at its Everett plant. Boeing has added two buildings here to handle 777X assembly work.
State Sen. Reuven Carlyle, a Seattle Democrat, applauded the agency’s decision. Like most state legislators, he supported the 2013 tax incentive package.
But Carlyle and other critics say lawmakers and the public should be able to evaluate company-specific information about tax breaks when making policy choices.
“There is no question there is a new default in this state and the default is openness and transparency rather than secrecy,” he said.
Some legislators, including Everett’s Rep. June Robinson, are expected to push in the upcoming legislative session a bill to tie the aerospace tax breaks to job numbers. Similar efforts stalled in previous sessions.
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