Aerospace product development

From the 2024 DOR Tax Exemption Study

Det. No. 14-0301, 34 WTD 120 (February 26, 2015) 123 Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, or making sales, at retail or wholesale, of commercial airplanes or components of such airplanes, manufactured by the seller, as to such persons the amount of tax with respect to such business is, in the case of manufacturers, equal to the value of the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, equal to the gross income of the business, multiplied by the rate of: (i) 0.4235 percent from October 1, 2005, through June 30, 2007; and (ii) 0.2904 percent beginning July 1, 2007. Alternatively, RCW 82.04.290(3) provides a separate preferential tax rate for non-manufacturing aerospace product development, which provides a preferential B&O tax rate of 0.9 percent for “every person engaging within this state in the business of performing aerospace product development for others.” In order to qualify for either of these preferential tax rates in any given year, both RCW 82.04.260(11)(d) and RCW 82.04.290(3)