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Taxes & Incentives
City Tax Incentives
Snohomish County cities use the issuance of the business license as their taxing vehicle. These license fees are not consistent from city to city. Some are a flat fee, some are a formula that can include number of employees, type of business and size of facility.
The City of Everett offers a credit of $1000 per job created to be taken against the City Business and Occupation Tax. The program requires a minimum of 50 new jobs and has a lifetime cap of $500,000.
Manufacturers located in Arlington, Marysville and Lake Stevens are exempt from property tax on the construction of new manufacturing buildings for ten years. Property tax on the land continues to be paid. The building must be a minimum of 10,000 square feet and the operation must create a minimum of 25 new jobs paying $18.00/hour or higher.
There is no license required on businesses located in unincorporated Snohomish County.
Please refer to the local communities for tax information.
County Tax Incentives
Property taxes are assessed and collected by the Snohomish County government. Taxes are distributed to the County, cities, school/hospital/library districts and the State.
The Snohomish County real and personal property tax rates are $11.20 per $1000 of assessed value at 100% of market value. Tax rates range from $ 7.6242 to $14.3786 depending on where a resident lives in the County.
State Tax Incentives
The State of Washington has:
- No corporate income tax
- No personal income tax
- No unitary tax (VAT)
- No inventory tax
- No tax on interest, dividends or capital gains
Washington State has an assortment of tax incentives. Those most frequently implemented by Snohomish County businesses are:
Aerospace firms incentives:
- Reduced B&O Tax rate for aerospace manufacturing.
- Credit against the B&O Tax for preproduction development expenditures.
- Credit against the B&O Tax for property/leasehold taxes paid on aerospace manufacturing facilities.
- Sales & Use Tax exemption for computer hardware/software and peripherals.
Agriculture & food processing incentives:
- B&O Tax exemption/deduction for manufacturers of fresh fruits and vegetables, seafood, and dairy products.
High technology firms incentives:
- Manufacturers of solar energy systems/components have a reduced B&O Tax rate. Additionally, installed equipment for the generation of alternative energy is exempt from the Sales Tax.
Job training financial support:
- The Job Skills Program offers customized training through the Community College system with 50% cost share by the State.
- The Customized Employment Training Program provides a credit against the B&O Tax for 50% of training costs.
The Sales and Use Tax is Washington’s principal revenue source. It is made of a state component at 6.5% and a local component at 1.2% – 3.8% for a total of 7.7% – 10.3%. Businesses making retail sales in Washington collect sales tax from their customers. A retail sale is the sale of tangible personal property. It is also the sale of services such as installation, repair, cleaning, altering, improving, construction, and decorating. Major exemptions to the sales tax include purchases for resale, groceries and prescription drugs, interstate and foreign sales, and manufacturing/processing equipment. The Tax is also applied on taxable items purchased in another state and brought to Washington if that state did not collect sales tax.
In place of a corporate income tax, Washington levies a Business and Occupation Tax (B&O) on the gross receipts of business activity occurring in the State. The primary rate classifications are:
- Manufacturing (general) - 0.484%
- Manufacturing (aerospace) - 0.2904%
- Wholesaling - 0.484%
- Retailing - 0.471%
- Aerospace Product Development - 0.9%
- Services - 1.5%