Washington Aerospace Tax Incentives

Washington Aerospace Tax Incentives

Funds Washington aerospace suppliers through preferential tax frameworks including business tax and sales relief.

Eligibility · United States · US-WA

Washington state offers six distinct statutory tax preferences for the aerospace sector, all administered by DOR on excise returns. Programs include: B&O Credit for Preproduction Development Expenditures (research, design, engineering activities in WA, expires July 1 2040); B&O Credit for Property/Leasehold Taxes (same eligibility cohort, expires July 1 2040); a preferential B&O rate (0.9% for non-manufacturing aerospace development; 0.2904% for FAR Part 145 repair stations, expires June 30 2040); and three sales/use tax exemptions covering new repair facility construction (expires January 1 2031), new airplane manufacturing facility construction (expires July 1 2040), and aerospace computer hardware/software/peripherals (expires July 1 2040). Eligible entities include manufacturers of commercial airplanes or components, non-manufacturers engaged in aerospace product development, certified FAR Part 145 repair stations, and aerospace tooling manufacturers.

None of these are competitive grants — there is no application process, no review cycle, and no award pool. Companies claim the credits on their excise tax returns and must file an Annual Tax Performance Report electronically by May 31 each year following any claim year. No formal pre-application is required; documentation requirements are worksheet-based (Aerospace Credit for Aerospace Product Development Spending worksheet for the preproduction credit).