People who live in Washington state have likely seen a recent burst of coverage in local news media following Boeing’s tax filing to the state Department of Revenue (DOR) this week. What has been lost in much of this coverage, Boeing leaders said, is that the company invested more than $13 billion in Washington in 2015.
As a result of those investments, Boeing reported $305 million in savings last year through the state’s aerospace tax incentive law. The law was designed so there is a direct and constant connection between the amount invested and the amount saved. Boeing invested more than any other company, so its savings will also top the list. If others invested more, they would see their savings rise.
Boeing’s investment comprises billions of dollars of expenditures for payroll, supplier purchases and capital investments in Washington. It includes hundreds of millions of dollars Boeing spent in the state for taxes.
This is a complex issue. Here are five important facts to know about Boeing's tax filing:
(1) Numbers prove the incentives are working as intended.
Upon comparing Boeing’s investments in the state to the tax savings, many leaders and informed observers are now going on the record stating that the Department of Revenue disclosure proves the incentives are working as intended.
State Sen. Reuven Carlyle (D-Seattle) recently wrote on his blog: “Today we are able to learn firsthand with hard data that the deal Washington taxpayers struck with The Boeing Company is, in fact, a win-win."
Another organization, Opportunity Washington, also posted an article stating, “… that’s a very good return on a sensible tax policy.”
(2) Invest more, save more.
Washington’s aerospace tax incentives are structured so that the more a company invests in the state, the more that company saves in taxes. The $305 million that Boeing reported represents not only the company’s current presence in Washington, but also the sizable capital investments the company is making as it develops the 777X, 737 MAX and other capabilities in the state that will provide benefits to Washington for years to come.
(3) Boeing invests in the Puget Sound community, in addition to the state’s aerospace capabilities.
Beyond the billions Boeing invested in Washington on employees and infrastructure in 2015, the company also provided more than $40 million in community contributions, plus more than $30 million towards employee continuing-education tuition, according to Boeing's 2015 Impact in Washington report.
(4) 470 Washington companies use the aerospace tax incentives.
Although Boeing is the only company whose taxes and spending are routinely scrutinized in media reports, the aerospace tax incentives are used by an ever-growing number of companies in the state.
(5) Many industries use Washington tax incentives.
Washington offers tax incentives to a wide range of industries including high tech, agriculture and newspapers. The state offers these incentives to offset Washington’s Business & Occupation (B&O) tax rate that is significantly higher than in most other states. Major companies such as Microsoft, Amazon, Weyerhaeuser, The Seattle Times and hundreds of others use these incentives. The Everett Herald just released a report highlighting other industries that benefit from incentives in Washington.