The lion’s share went to Boeing, but 286 others also got their state tax bills reduced in the past two years thanks to Washington’s special incentives for the industry.
The state’s aerospace tax breaks cut the tax bills of local aerospace companies over the past two years by $553 million, according to data released by the Department of Revenue.
While Boeing received the lion’s share of that tax relief — 93 percent — an additional 286 companies in the state benefited in smaller ways.
After last month’s release of data on Boeing’s savings, the state Department of Revenue has released similar data for all the local companies that supply Boeing or have some role in the aerospace economy.
Coming in second behind Boeing’s mighty $517 million in aerospace tax relief for 2014 and 2015 was Mukilteo-based Electroimpact, the high-end engineering company that designs and builds automated manufacturing equipment for Boeing, Airbus and other plane makers.
Most Read Business Stories
- Take a peek inside Nordstrom's luxurious new New York City flagship store VIEW
- Boeing's defense of 737 MAX's flight-control system in wake of pilot messages stands up
- Boeing denies pilot messaging chat shows prior knowledge of 737 MAX flight control problem
- Stunning messages from 2016 deepen Boeing's 737 MAX crisis
- Inside billionaire money manager Ken Fisher’s Washington-based private kingdom, where hardball culture reigns
The tax breaks saved Electroimpact a combined $2.4 million over the two years. Electroimpact employed 553 people in the state at the end of 2014, according to the latest state filings.
Ben Hempstead, chief of staff at Electroimpact, said Washington state gets great value from the tax breaks.
“The state gets the benefit of having the highest concentration of suppliers in the aerospace supply chain located here, and the large number of diverse jobs that provides,” he said. “We have a payroll that exceeds $50 million a year in Mukilteo. Those savings are less than 5 percent of our annual payroll.”
The tax incentives were passed in 2003 and consist of a 40 percent reduction in the business and occupation tax, along with credits for development expenditures and sales-tax exemptions on equipment purchases.
Kelly Maloney, chief executive of the Aerospace Futures Alliance, the state aerospace lobbying organization, said it’s easy to justify the tax breaks.
“The investment that aerospace companies put into this state is far greater than the tax incentives they receive,” she said
Maloney added that the direct and indirect jobs as well as the capital expenditures by aerospace companies and their charitable contributions combine for “a very significant positive impact on the state’s economy.”
The tax breaks, she said, “are a small price to pay for such a huge return.”
An economic-impact study compiled by Seattle consulting firm Community Attributes estimated that in 2014 the aerospace industry supported a total 267,000 direct and indirect jobs in Washington state that paid out $22 billion in wages.
These are the other companies that saved more than a million dollars over the two years, according to the state data:
• Kent-based Exotic Metals, which specializes in designing and fabricating sheet-metal assemblies and components, mostly from titanium and nickel alloys, saved $1.8 million.
Exotic employed 918 here at the end of 2014, state filings show.
• Toray Composites America, which produces the carbon-fiber-composite raw material Boeing uses on the 777 and 787, saved $1.7 million in 2015 alone.
No corresponding figure for 2014 was given for Toray. The Department of Revenue cautions that the data is incomplete; the 2014 figures were asked for retroactively and some companies haven’t yet filed the required data for that year.
• Senior Operations, which employed 740 in plants in Arlington and Monroe: $1.5 million.
• Astronics Advanced Electronic Systems of Kirkland, with 450 employees: $1.4 million
• Kaiser Aluminum, which employed 951 in Spokane: $1.3 million
• Hexcel, which employed 950 in Kent and Burlington, Skagit County, producing composite components: $1.2 million.
• Primus, which employed 275 at the end of 2014 at machining plants in Auburn and Bothell and at an actuation-systems facility in Woodinville: $1 million.
Boeing’s savings of $517.4 million in tax payments for the two years come from the aerospace-specific tax breaks. That doesn’t include $4.3 million more Boeing saved because of a separate tax break for its data center in Quincy.
That’s a two-year total of $522 million in tax relief for Boeing.
In response to criticism of the tax breaks, Boeing points out that in 2015 — when its tax break was $305 million — it invested more than $13 billion in the state, largely in payroll, supplier purchases and large capital projects including the 777X wing center in Everett.
Information in this article, originally published June 8, 2016, was clarified June 9, 2016. After initial publication, the Department of Revenue data said that its data is not complete, which may explain why some companies such as Toray show tax savings in one year only.