Business Incentives and Assistance

The City of Seattle prioritizes long term economic development planning that promotes job growth, attracts new businesses, and helps existing businesses expand and grow profitably. To support that effort, the City and Washington State offer a list of flexible business incentive programs. The following list of industry-related and employee hiring and training incentives are available for your business.

Industry-Related Tax Incentives

Aerospace Industry Incentives

New programs related to both manufacturers of commercial planes and companies manufacturing component parts for commercial planes are available through the State of Washington. These include a B&O Tax Credit for Preproduction Development Expenditure, B&O Tax Credit for Property Taxes Paid, B&O Tax Credit for Computer Software and Hardware Acquired before December 1, 2003, and a Retail Sales and Use Tax Exemption for Computers.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Manufacturing Sector

Manufacturing Machinery Sales and Use Tax Exemption
New or replacement manufacturing machinery and equipment is exempt from retail sales and use tax if it is used in a manufacturing operation. Both materials and installation labor are included for machinery, equipment, pollution control equipment, and the internal use portion of co-generation equipment. Also included are repair parts and labor for manufacturing machinery, manufacturer's R&D equipment, testing equipment, and certain logging and rock-crushing activities.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Empowerment Zone Sales Tax Deferral
This sales tax deferral program is available for new or remodeled buildings and/or equipment used in manufacturing or research and development activities in community empowerment zones. Prior application with Department of Revenue is required.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Biotechnology and Information and Communication Technology

High Technology Sales/Use Tax Deferral
A sales and use tax deferral for research and development and pilot scale manufacturing firms in specified high technology categories. These categories include advanced computing, advanced materials, biotechnology, electronic device technologies, and environmental technologies. Prior application with Department of Revenue is required.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Research and Development Business and Occupation Credit
A 1.5 percent business and occupation tax credit can be taken on research and development expenditures other than capital improvements. The credit can be applied to specified activities including advanced computing, advanced materials, biotechnology, electronic device technologies, and environmental technologies. The credit is limited to $2 million per year.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Small Business B&O Tax Credit

A credit is available for small businesses and is adjusted to the amount of B&O tax liability. The net B&O tax liability must be below $71 for monthly taxpayers, $211 for quarterly taxpayers, or $841 for annual taxpayers.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

International Services Tax Credit

Firms engaged in international services may receive a tax credit of $3,000 per new job created. Firms must be located in community empowerment zones or international service districts in areas with populations of at least 80,000.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Employee Hiring Incentives

Business and Occupation Tax Credit for New Jobs
A $2,000 or $4,000 (if wages exceed $40,000) credit against the business and occupation tax is available for each new employment position created and filled by a manufacturing, research and development, or computer service firm in community empowerment zones (CEZ). The credit applies to new businesses in the CEZ, or a business increasing their workforce by 15% in the last year. Prior application with the Department of Revenue is required.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Work Opportunity Tax Credit
A federal tax credit of up to $2,400 is available for companies with new hires from groups that have high unemployment rates or other special employment needs. These groups include, but are not limited to veterans, ex-felons, youth from specific areas, or citizens receiving assistance.
Contact: Internal Revenue Service at www.irs.gov or IRS form 5884

Welfare to Work Wage Credit
A two-year federal tax credit is available for businesses that hire long-term family assistance recipients. The credit is available for 35% of the employee's first-year qualified wages and 50% for the second-year wages.
Contact: Internal Revenue Service at www.irs.gov or IRS form 8861

Employee Training Incentives

Washington's Job Skills Program (JSP)
This program funds half the cost of a customized training program for new or current employees for a business. Employers provide a cash or in-kind match to fund the other half. The training can be provided at the work site or in a classroom. JSP's central focus is to provide training and employment opportunities for the unemployed, or those at risk of losing their jobs due to technological or economic changes. Funding is provided through licensed educational institutions in Washington.
Contact: Washington State Department of Community, Trade and Economic Development at www.cted.wa.gov/ or 360-753-3650

Credit for Job Training Services
This program offers a credit of twenty percent of the cost spent on job training by firms eligible for the Empowerment Zone sales tax deferral/exemption may be taken as a business and occupation tax credit. The training is required to enhance job performance in a state-approved program sponsored or provided by the employer. The amount of credit for a particular firm is limited to $5,000 annually.
Contact: Washington State Department of Revenue at http://dor.wa.gov or 206-956-3002

Workforce Investment Act (WIA)
WorkSource can fund training costs for WIA eligible new applicants for entry level positions and on-the-job (OTJ) training costs for incumbent workers selected for advancement for higher skilled positions.
Contact: Worksource at www.worsourceskc.org or 206-436-8600