Taxes & Incentives

Business expansion incentives in Washington are just some of the many incentives offered by the state. An exhaustive list of these incentives can be found here.

Featured State Incentives

• No personal state income tax
• No corporate income tax
• No inventory tax
• State Machinery and Equipment (M&E) Sales/Use Tax Exemption: For machinery and equipment used directly in manufacturing or research
• State Warehouse Tax Incentive: For new warehouse construction or expansion that is 200,000 square feet or greater
• State Sales/Use Tax Deferral/Waiver for Corporate HQ: Available to businesses with corporate headquarters locating in an eligible Community Empowerment Zone
• Tax Exemption for Nonurban Data Centers: Available for purchases of eligible server equipment and eligible power infrastructure for an eligible computer data center located in a nonrural county.

Tacoma-Pierce County’s supportive business climate is showcased by programs like the family-wage jobs credits and expedited permitting.

Family-Wage Job Credit Program

Tacoma-Pierce County’s Family Wage Job Credit program provides a one-time $275 credit per job to employers who create at least five new permanent family-wage jobs in the following areas: Unincorporated Pierce County, the City of DuPont, the City of Lakewood, the City of Sumner, the City of University Place and the Town of Steilacoom.

City of Tacoma Job Credit Program

The City of Tacoma’s Job Credit program provides a $500 B&O tax credit every year for five calendar years if a company adds an additional full-time job, pays that employee a family wage and keeps that position for at least five calendar years.

100% Traffic Fee Exemption

Tacoma-Pierce County offers a 100% traffic impact fee exemption for manufacturing, corporate headquarters and R&D centers in unincorporated areas.

Washington State has been an avid supporter of the aerospace industry for more than a century and offers the following incentives for the industry:

• Reduced B&O Tax Rate for Aerospace Businesses: For manufacturers of commercial airplanes or component airplanes and aerospace tooling manufacturers
• Aerospace Industry B&O Tax Credit for Pre-production Development Expenditures: For expenditures in research, design and engineering activities related to the development of aerospace products or models by manufacturers of commercial airplanes or component parts of commercial airplanes
• Aerospace Industry B&O Tax Credit for Property Taxes Paid: For qualifying real estate used exclusively in the manufacturing of commercial airplanes or component parts of commercial airplanes
• Aerospace Industry Sales/Use Tax Exemption for Computer Hardware, Software & Peripherals: For manufacturers of commercial airplanes or component parts of commercial airplanes
• Tax Exemption for Construction of Facilities Used to Manufacture Commercial Airplanes: For the construction of new facilities and new parts of facilities that will be used primarily to manufacture commercial airplanes and components
• 100% traffic impact fee exemption for manufacturing, corporate headquarters, and R&D centers in unincorporated areas

As the home of one of the strongest logistics networks on the North American West Coast, the state of Washington offers industry incentives just as strong as our logistics network.

• No sales or use tax on machinery and equipment used in manufacturing operations
• One of the largest, most successful foreign trade zones
• 100% traffic impact fee exemption for corporate headquarters centers in unincorporated areas
• Workforce training grants and credits
• Other project-specific state and local programs

Named one of the states with the highest percentage of jobs in high-tech industries by WalletHub, the state of Washington offers robust incentives for tech companies.

Business & Occupation (B&O) tax rate of 0.4% for all office and service businesses; state and local tax breaks for new employers can help offset this

• 100% traffic impact fee exemption for manufacturing, corporate headquarters, and R&D centers in unincorporated areas
• Construction materials sales tax rebate for eligible Class A office space construction and refurbishment
• Job training funds through licensed educational institutions
• Electric rates 50% below national averages and 60% below West Coast averages
• State of Washington B&O Tax Credit for customized training
• State of Washington Strategic Reserve Fund
• Tax Exemption for nonrural data centers.
• Other project-specific state and local programs