FOR IMMEDIATE RELEASE - March 29, 1996
Lowry signs tax incentive legislation to help manufacturers
SEATTLE -- Up to 2,700 manufacturing
businesses are expected to benefit from a new tax incentive measure
signed into law today by Gov. Mike Lowry.
House Bill 2484 which is expected to save manufacturers about
$15 million per year will extend an existing tax exemption to
include machinery and equipment that manufacturers use to research
and develop potential new products. Under the new law, companies
will be able to buy research and development equipment without
paying up to 8.2 percent sales or use taxes on that equipment.
Lowry said HB 2484 is the latest in a series of tax incentive
measures that are helping Washington companies expand or stay
in business, while also encouraging outside manufacturers to locate
in the state.
"Our state's exceptional quality of life is a major part
of the reason why companies are choosing to expand into Washington,"
Lowry said. "When you add to that such job-creating tax
incentives as this new law, and others we have enacted recently,
it's no wonder that our state's job growth rate is expected to
be twice the national average over the next couple of years."
Lowry signed the legislation at the Boeing Integrated Systems
Lab in Seattle where computer simulations were used to accelerate
the development of the Boeing 777. The governor said the legislation
will likely increase R&D investment into aerospace, forest
products, transportation equipment and practically anything else
that manufacturers conceivably could build.
According to Lowry, the R&D tax incentives, coupled with
manufacturing repair and replacement tax incentives he signed
into law Thursday, will solidify the gains the state has made
since it last year eliminated the sales and use tax on the purchase
of machinery and equipment used directly in manufacturing.
The 1995 law, he said, has made the state more competitive with
other states and has led to more than $3 billion in investment
by major manufacturers. Earlier this month, the Taiwan Semiconductor
Manufacturing Company announced that it would build a $1.2 billion
silicon chip foundry in Clark County.
Lowry said last year's tax incentives have already produced strong
results, and this year's legislation will help the state follow
through on other recommendations of a manufacturing advisory committee.
That committee concluded that Washington's high sales tax had
become a serious deterrent to capital investment in this state.
Lowry said the R&D incentives will spur long-term growth
of the economy, further broaden the industry diversification that
has helped the state weather the Boeing slump and still increase
jobs, and capitalize on Washington's reputation as a high-technology
In addition, he said, the R&D incentives, coupled with similar
high-tech incentives enacted at his request in 1994, will encourage
companies to locate in Washington, while the manufacturing tax
incentives enacted in 1995 will encourage manufacturers to build
their new products here.
"We're making this state more attractive to mature companies
and entrepreneurial startups alike," Lowry said. "We
are creating good-paying R&D jobs in this state, and we're
laying the groundwork for getting the manufacturing jobs that
may eventually result from that research. That makes this a wise
investment in our economic future."
For more information, contact the Governor's Communications Office at 360-753-6790.