Aerospace taxes

This bill makes the following aerospace business and occupation tax preference changes, effective April 1, 2020:

• Manufacturers and processors for hire of commercial aircraft and components of such aircraft are subject to a business and occupation tax rate of 0.484% on their manufacturing, wholesaling and retailing activities.
• Manufacturers and processors for hire of certain aerospace tooling are subject to a business and occupation tax rate of 0.484% on their manufacturing and wholesaling activities, and a business and occupation tax rate of 0.471% on their retailing activities.

After March 31, 2021, a preferential rate of 0.357% will be implemented when all of the following conditions are met:

• The United States and European Union reach an agreement resolving their World Trade Organization disputes regarding large civil airplanes.
• The agreement expressly allows a preferential business and occupation tax rate of 0.357% or less.
• The Department of Commerce notifies the Department of Revenue that an agreement has been reached.
• The Department of Labor & Industries notifies the Department of Revenue that a significant commercial airplane manufacturer has at least a 0.3% “aerospace apprenticeship utilization rate.”

Effective March 25, 2020 (ESB 6690, Chapter 165, Laws of 2020)

• Aerospace manufacturers tax incentives
• Aerospace tooling manufacturers tax incentives