Suspension of aerospace tax incentives passes Senate. House approval expected soon.

The Senate has passed SB 6690, suspending aerospace tax exemptions, in an effort to resolve a dispute with the World Trade Organization. The legislation was requested last month by The Boeing Company.

Reporting in the Everett Herald, Jerry Cornfield writes,

The state Senate on Tuesday approved a much-worked bill to repeal a tax break for Boeing — but not give it all back in the future.

Senate Bill 6690 seeks to resolve an international trade dispute between the U.S. and the European Union and prevent billions of dollars in retaliatory tariffs on the aerospace giant’s planes, its suppliers’ products and other Washington exports such as fruit, wine and seafood.

While approval has been expected – the measure had widespread support from trade and business organizations – there was some legislative concern over the reinstatement of the incentives. Cornfield explains,

The Boeing Co. asked state lawmakers to roll back a preferential business-and-occupation tax rate which the World Trade Organization targeted as an illegal trade subsidy…

The aerospace giant wanted the full tax break reinstated when the dispute ended. But many Democratic lawmakers didn’t want to do so unless they could impose some new conditions on it.

For several days, Democratic members of the House and Senate, and a representative of Gov. Jay Inslee, worked on language.

What emerged Tuesday would restore only a portion of the tax break if the company successfully resolves the trade dispute and meets certain conditions…

In addition, Boeing must prove that a portion of its workforce, three-tenths of 1%, are apprentices. To keep the lower tax rate, the percentage both at Boeing and, separately, in the rest of the aerospace industry must be 1.5% by April 1, 2026, or within five years after the lower tax rate is reinstated.

“Everyone is fairly equally unhappy,” House Speaker Laurie Jinkins, D-Tacoma, said of the deal.

Most likely. Cornfield includes this:

“We applaud the Senate for its commitment to full WTO compliance,” Boeing spokesman Bryan Watt said in an email. “We support this legislation and look forward to the House vote.”

With the Legislature scheduled to adjourn tomorrow after passing the supplemental budget, action is expected soon