Timber and wood products extracting or manufacturing

From the 2024 DOR Tax Exemption Study

82.04.260(12) - Timber and wood products extracting or manufacturing Description Persons extracting or manufacturing timber and selling timber and wood products at wholesale receive a preferential B&O tax rate of 0.2904% (0.3424%, if including 0.052% surcharge). Previously, these activities were subject to a B&O tax rate of 0.484%. This special rate also applies to the manufacturing of mass timber products. Persons selling standing timber, if severed within 30 months of the sale agreement, receive a Real Estate Excise Tax (REET) exemption under this preference and pay B&O tax at 0.2904% (0.3424%, if including 0.052% surcharge). Without this preference, these activities would be subject to REET instead of B&O tax. Both the preferential tax rate and surcharge expire July 1, 2045. Purpose To encourage businesses in the timber industry to continue operating in Washington. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $20.800 $21.700 $22.600 $23.500 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this preferential B&O tax rate would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full