In an attempt to resolve a trade dispute with the World Trade Organization, Boeing has asked for a suspension of the aerospace tax incentive program passed by the Legislature in 2003 and extended in 2013. The request has wide-spread business support. A recent editorial in The Seattle Times highlights one of the major issues complicating its swift approval. Critics of the incentives want to use the suspension as an opportunity to renegotiate terms. The editorial states,
The consequences of linking a potential restoration of the tax break to new jobs guarantees — as labor leaders asked — could be disastrous to the state’s business trustworthiness. Boeing has not violated the terms of the deal Gov. Jay Inslee and lawmakers extended in 2013, which include a 40% reduction to the Business and Occupation (B&O) tax for 335 aerospace companies.
The editorial board urges lawmakers to honor its commitments.
Washington’s relationships with its largest employers must be built on mutual respect and trust, rather than seizing any opportunity to shake out better terms. Truly exceptional circumstances led to this opportunity to come out ahead on state revenue while helping Boeing…
The piece concludes:
Lawmakers should approve the tax proposal and invest the money wisely. If the bill passes as written, the tax break could be reinstated if WTO allows it. If that provision stands, the added revenues should be devoted to one-time needs.
Makes sense. In Crosscut, Melissa Santos reports on some of the ideas for spending the revenue gain from suspending the tax incentive.