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HB 2546: A Shot in the Arm for Washington's High-Tech Industry |
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Written On: May/June 2004 |
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Washington's economy received a great boost from 2004's legislative session. By extending B&O tax credits and sales tax exemptions for high-tech research and development, Washington increased its competitiveness.
HB 2546, sponsored by Representative Jim McIntire (D-Seattle) extends the tax credits, set to expire this year, to 2015. In addition, the high-technology R&D tax credit now includes state research universities. Another feature of the legislation is that businesses involved in high-tech R&D and pilot scale manufacturing are allowed to defer sales and use taxes on buildings, machinery, equipment and installment labor.
Governor Locke signed the bill into law on February 19.
Nowhere in the state will be more positively impacted by this legislation than Clark County, heart of Washington’s semiconductor industry. Indeed, it was after R&D tax credits were first enacted in 1989 that the industry began setting up shop on a large scale in the Vancouver area. Major Clark County semiconductor manufacturers, such as SEH, Linear Technologies, Sharp Microelectronics and Wafer Tech, have all benefited from the tax credits.
HB 2546’s positive impact is not limited to semiconductor firms. Other high-tech industries, including biotech companies, may defer sales and use taxes, which is essential when years of research and development may elapse before a company has a marketable product.
HB 2546 attracted much support in both the Republican-controlled Senate and in the Democrat-controlled House of Representatives.
“The sales tax exemption has proven itself to be successful in creating jobs in this state,” observed Speaker of the House Frank Chopp (D-Seattle) at AWB’s 2004 Legislative Briefing.
“We want to create jobs in this state,” concluded Senate Majority Leader Bill Finkbeiner (R-Kirkland). “We want people to have optimism that when their kids graduate from college they’re going to be able to find jobs in this state.”
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