RELOCATION INFORMATION - Taxes

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Corporate and Personal Income Tax
The State of Washington does not impose a corporate income tax. Washington is one of only a few states that does not levy a personal income tax, or impose a tax on intangible assets such as bank accounts, stocks, or bonds. In addition, Washington State does not assess any tax on retirement income earned and received from another state.

Property Tax
Property taxes are one of the primary sources of funding for local governments. Property tax varies throughout the state, due mainly to voter-approved special levies. The average rate is approximately $14.00 per $1,000 of fair market value. Personal property taxes are levied on the assets of businesses only.

Retail Sales Tax
Retail sales tax applies to most items sold to consumers. In Washington food, food ingredients, and prescription drugs are not taxed. Generally, no sales tax is charged on utility services, personal services (medical, dental, legal, barber, etc.), and real estate (although construction services and building materials are subject to sales tax). The retail sales tax is comprised of both a state and local portion. Within the PEDD the combined rate ranges from 7.5 percent to 7.9 percent. Taxable retail sales vary within each county with some posting a decline and others showing areas of increase. Please refer to the chart on the next page for more information.

Deferrals, Exemptions and Credits
The state of Washington offers several tax deferrals, exemptions, and credits making Washington an attractive place to do business. New and existing manufacturers, research and development firms, and certain high technology companies can benefit from several tax incentives. These incentives are intended to encourage the creation and preservation of family-wage jobs in the manufacturing and high technology sectors, particularly where high unemployment exists.
Sales/Use Tax Exemption on Machinery, Equipment, and Buildings - Manufacturers, processors for-hire, and manufacturers who locate in the PEDD and perform research and development are not required to pay the sales or use tax on machinery and equipment used directly in the manufacturing or research operations.
Rural Area Sales/Use Tax Deferral/Exemptions - This program defers or waives sales/use tax for manufacturing, research and development, or computer-related businesses locating in the PEDD.
Rural Area Business and Occupation Tax Credit – A credit against the business and occupation tax ranging from $2,000 to $4,000 is available for each new employment position created and filled by specific industries in rural counties.
High Technology Sales/Use Tax Deferral/Exemption – This program defers or waives sales and use tax associated with construction, expansion, or renovation of qualified buildings and acquisition of qualified machinery and equipment in research and development, and pilot scale manufacturing in specific industries.
High Technology Business and Occupation Tax Credit - An annual credit of up to $2 million is allowed for businesses that perform research and development in Washington in specified high technology categories and meet minimum expense requirements.