Taxes and Incentives

Washington State Taxes and Incentives

All Washington State businesses enjoy

  • No corporate income tax
  • No personal income tax
  • No unitary tax (VAT)
  • No inventory tax
  • No tax on interest, dividends or capital gains
  • Washington State has an assortment of tax incentives. For a complete overview of State incentives, please visit Washington State Department of Revenue

All manufacturing equipment is exempt from the Sales and Use Tax

  1. Aerospace firms
  2. High technology firms
  3. Agriculture & food processing
  4. Job training financial support

Aerospace firms incentives

  • Reduced B&O Tax rate for aerospace manufacturing
  • Credit against the B&O Tax for preproduction development expenditures
  • Credit against the B&O Tax for property/leasehold taxes paid on aerospace manufacturing facilities
  • Sales & Use Tax exemption for computer hardware/software and peripherals

Property Tax

Property taxes are assessed and collected by the Snohomish County government. Taxes are distributed to the County, cities, school/hospital/library districts and the State.

Real Property Tax Rate

  • $11.20 per $1000 of assessed value at 100% of market value

Personal Property Tax Rate

  • $11.20 per $1000 of assessed value at 100% of market value.
  • Tax rates ranged from $ 7.6242 to $14.3786 depending on where you live in the County
  • Detailed property tax information is available through the Snohomish County Assessor

City of Everett Multifamily Property Tax Exemption (MFTE)

  • The City offers both 8-year and 12-year property tax exemption on the value of improvements to qualifying multifamily projects in designated urban centers, including Metro Everett
  • MFTE Application

Business and Occupation Tax (B&O)

In place of a corporate income tax, Washington levies a B&O tax on the gross receipts of business activity occurring in the State. Complete information on the B&O tax and additional rate categories can be found through the Department of Revenue.

City of Everett B&O Credit

  • The City offers a credit of $1000 per job created to be taken against the City B&O Tax
  • The program requires a minimum of 50 new jobs and has a lifetime cap of $500,000

Primary rates by classification

Manufacturing (general) 0.484%
Manufacturing (aerospace) 0.2904%
Wholesaling 0.484%
Retailing 0.471%
Aerospace Product Development 0.9%
Services 1.5%

Retail Sales and Use Tax

The Sales and Use Tax is Washington’s principal revenue source. It is comprised of a state component at 6.5% and a local component at 1.2% – 3.8%; total 7.7% – 10.3%. Businesses making retail sales in Washington collect sales tax from their customer. A retail sale is the sale of tangible personal property. It is also the sale of services such as installation, repair, cleaning, altering, improving, construction, and decorating. Major exemptions to the sales tax include purchases for resale, groceries and prescription drugs, interstate and foreign sales, and manufacturing/processing equipment. The Use Tax is applied on taxable items purchased in another state and brought to Washington if that state did not collect sales tax. Use Tax rates are the same as Sales Tax.

Complete information on the Sales and Use Tax can be found through the Department of Revenue.