STATE GOVERNMENT
House Dems unveil corporate tax accountability plan
OLYMPIA (Feb. 19, 2016) — A group of more than two dozen House Democrats on Thursday announced a new package of bills to hold corporations accountable for the tax breaks they receive. The plan will repeal, narrow and attach stipulations to five tax breaks that currently benefit big national and international banks, oil refineries, the aerospace industry, and other corporations.
“Once again, the recipient of the biggest tax break in Washington history announced it would be sending workers home with pink slips instead of paychecks,” said Rep. June Robinson (D-Everett), who is sponsoring the bill to tie Boeing’s tax break to Washington job levels. “This just days after lobbyists protected the company’s tax break. The people of Washington deserve better. I’m introducing this bill to hold Boeing accountable to our taxpayers.”
The package consists of five separate bills with five separate sponsors:
This new legislation would tie Boeing’s tax preference to in-state jobs. To maintain eligibility to claim the aerospace preferential B&O rate, Boeing would be required to make a contribution to the state education legacy fund equal to $2,500 for each lost job below a baseline of 83,295 Washington jobs — the company’s in-state employment at the time of the 2013 aerospace tax package.
In 1949, the state created a tax exemption for extracted fuel to help the timber industry. Today, 98 percent of the cost of this break is taken by the state’s five oil refineries. This legislation would repeal the use tax exemption for extracted fuel used in manufacturing for oil refineries, but maintain it for hog fuel (the original intent of the preference).
Narrowing real estate interest income B&O deduction (Rep. Jessyn Farrell, D-Seattle)
In 2012, the Legislature limited this tax preference to community banks with offices or employees in 10 states or fewer. But a JLARC review last year found many banks that would not traditionally be thought of as community banks — like Goldman Sachs, CapitalOne and Barclays — are still able to qualify. This bill would define community banks as banking organizations with $10 billion or less in assets, using the Federal Reserve Bank’s definition.
Repealing international banking facilities B&O tax exemption (Rep. Marcus Riccelli, D-Spokane)
This legislation would repeal a B&O tax exemption for international banking facilities in Washington. International banking facilities are branches of foreign banks, segregated accounts by commercial banks for international banking, and certain corporations under the Federal Reserve Act. This preference has been on the books since 1982 and has never been reviewed.
In 2013, the Legislature created a sales tax exemption for large private airplanes and repair, cleaning, retrofitting, etc. of such planes. This bill would eliminate the sales tax exemption for the purchase, repair and retrofitting of large private airplanes by corporations. The preference would be maintained for sales to individuals and for repairs, cleaning, etc. on individual airplanes. Corporations will no longer claim a tax break when they buy a corporate jet.