Tax Abatement for Solar Manufacturers

In May 2005, Washington Governor signed Senate Bill 5111, establishing a lower business and occupation (B&O) tax rate specifically for state manufacturers of photovoltaic modules, stirling converters, and silicon components used in these systems.

Later, in May 2009, SB 6170 was passed and became effective on July 1, 2009. This legislation further reduced the B&O tax rate to 0.275% starting October 1, 2009, marking a 43% reduction from the standard manufacturing B&O tax rate. The reduced rate was applicable to manufacturers of various components used exclusively in solar energy systems, including photovoltaic modules, stirling converters, solar grade silicon, and others. Initially, stirling converters were not eligible for this tax relief, but they were included following the enactment of Senate Bill 5526 in July 2011.

Companies taking advantage of this incentive are obligated to submit annual tax surveys to the Washington Department of Revenue (DOR). These surveys must include data on employment, wages, and provided health and retirement benefits. The DOR then compiled this data into a report for the Washington State Legislature, which was presented in November 2013. The incentive, initially set to end on June 30, 2014, received an extension to June 1, 2027, as per SENATE BILL 5977.

Furthermore, SENATE BILL 5849 extended the duration of this reduced tax abatement from July 1, 2027, to July 1, 2032.