Washington Incentives and Workforce Development Guide
The updated Washington incentives guide is brought to you by Real Street Expo, a new event sponsored by Business Facilities and Today’s Facility Manager magazines.
For a list of Washington economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
- The Capital Access Program (CAP):
- Can help small businesses secure financing in the difficult post-recession credit environment. The CAP encourages lenders to make small business loans that fall just short of conventional business loan approval. The program will mitigate the risk by providing additional funds that lenders can use to cover losses from loan defaults. CAP website for Business CAP website for Lenders.
- Craft3 Fund:
- A non-profit Community Development Financial Institution (CDFI) that lends to small businesses in underserved communities across the state, including by partnering with other small business lenders. Through its SBCI partnership, Craft3 will generally make loans from $250,000 to $5 million (smaller loans are also available directly from Craft3).
- W Fund:
- Projected to be a $25 million venture fund, will invest in early-stage life science, biotech, medical device, alternative energy, and information technology companies emerging from universities, research centers and individual start-ups across Washington. The objective is to spur company formation and job creation from Washington’s significant research and development base. Fund recipients will be located in the state, providing vital capital and creating economic opportunity in key growth sectors.
- Community Empowerment Zone Program (CEZ):
- A competitive program intended to spur neighborhood revitalization and reinvestment. To receive state CEZ designation, the six eligible jurisdictions identified targeted neighborhoods, undertook a planning and public involvement process, and adopted a five-year plan to guide resource investments. The CEZ designation enables qualified businesses to apply to the Washington State Department of Revenue for sales tax deferrals and business and occupation tax credits for a variety of projects. The statutory authority for the CEZ program is found in Chapter 43.31C of the Revised Code of Washington (RCW).
- High Unemployment County Sales/Use Tax Deferral/Waiver for Manufacturing Facilities:
- Available to manufacturers, persons conditioning vegetable seeds, research and development and commercial testing for manufacturers in a qualifying county or in a Community Empowerment Zone (CEZ). Qualifying counties are those counties with an unemployment rate at least 20% higher than the statewide rate based on a three year average published by the Employment Security Department. Qualifying activity:
- certain construction and equipment purchases for new and expanding businesses. The application must be filed before building permit is issued or business takes possession of machinery and equipment and qualified activity must be maintained at the site for eight years after certified operationally complete.
- Sales and Use Tax Exemption for Manufacturing Machinery & Equipment (M&E):
- Available to manufacturers and processors for hire performing manufacturing and R&D. Testing operation for a manufacturer and processor for hire. To qualify, the manufacturer must purchase qualifying machinery and equipment used directly in a manufacturing operation or research and development performed by a manufacturer, or testing operations performed for a manufacturer.
- B&O Tax Exemption for Manufacturing Fresh Fruit & Vegetables, Dairy & Seafood Products:
- Available to manufacturers of fresh fruit and vegetables, dairy and seafood products. Qualifying Activity:
- manufacturing fruit or vegetable products by canning, preserving, freezing, processing or dehydrating fresh fruits or vegetables or wholesale sells by the manufacturer when the goods are transported out-of-state by customer in normal course of business. Manufacturing dairy and seafood products or wholesale sells by the manufacturer when goods are transported out of state by buyer in normal course of business. Annual Survey filed by April 30.
- B&O Credit for Preproduction Development Expenditures:
- Available to manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers. Qualifying Activity: expenditures for aerospace product preproduction development. Credit amount is equal to amount of qualified expenditures multiplied by 1.5%.
- Rural County/Community Empowerment Zone (CEZ) Incentives:
- Purchases of Server Equipment and Power Infrastructure for use in Eligible Data Centers – Sales/Use Tax Exemption: Available to the owner of an eligible data center with a combined square footage of at least 100,000 square feet and lessees of at least 20,000 square feet within an eligible data center located in a rural county.
- B&O Credit for New Employees in Manufacturing and Research & Development in Rural Counties: Available to manufacturers, R&D laboratories, and commercial testing facilities located in rural counties or within a CEZ. To qualify, the company must create new employment positions/increase instate employment by 15%. In turn, this incentive gives a $2,000 credit/position with annual wages/benefits of $40,000 or less; or a $4,000 credit/position with wages/benefits of more than $40,000 annually.
- High Technology B&O Credit for R&D Spending:
- Available to businesses conducting research and development (R&D) in Washington State in the R&D fields of advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology.
- High Technology Sales & Use Tax Deferral /Waiver:
- Available to businesses conducting R&D and pilot scale manufacturing in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, environmental technology. Qualifying Activity:
- certain construction and equipment purchases for new and expanding businesses. The application for deferral must be filed before a building permit is issued and qualified activity must be maintained at the site for eight years.
- B&O Credit for Property/Leasehold Taxes Paid:
- Available to manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales and aerospace tooling manufacturers.
- Remittance of State Sales Tax for Warehouses, Distribution Centers, Grain Elevators, Cold Storage:
- Available to Wholesalers or third-party warehousers who own or operate warehouses, grain elevators and cold storage warehouses, and retailers who own or operate distribution centers. Qualifying Activity:
- Construction of a 200,000 square foot warehouse or distribution center or a grain elevator with a one million bushel capacity. A refund of all or part of the state’s portion of sales tax paid on qualifying construction and material racking/handling equipment (state’s portion 6.5%).
- Solar Energy System and Components of Solar Energy Systems Manufacturers:
- Reduced B&O Tax Rate available to manufacturers, manufacturers that sell their product at wholesale and processors for hire of solar energy systems and specified components of solar energy systems using photovoltaic modules or stirling converters.
- Energy Production Using Solar, Methane, & Wind Power:
- Cost Recovery Program available to individuals, businesses, local government entities that are not in the light and power business or gas distribution business, and participants in a community solar project.
- Reduced B&O Tax Rate for Aerospace Businesses:
- This incentive is available to manufacturers and processors for hire of commercial airplanes or component parts of commercial airplanes, non-manufacturers engaged in the business of aerospace product development, certificated FAR repair stations making retail sales, and aerospace tooling manufacturers.
- Job Skills Program (JSP):
- Training customized to meet employers’ specific needs. Training is delivered to new or current employees at the work site or in a classroom. JSP training is a tool for enhancing the growth of Washington’s economy and increasing employment opportunities. It provides funding for training in regions with high unemployment rates and high levels of poverty. It also supports areas with new and growing industries; locations where the local population does not have the skills needed to stay employed; and those regions impacted by economic changes that cause large-scale job loss. JSP awards grants to licensed educational institutions in Washington. JSP funds half of the training cost; partner employers provide a cash or in-kind match to fund the other half.