B&O Tax Credit for Manufacturing Companies that are Adding New Jobs

By Jonathan Smith, CEcD
Executive Director
Yakima County Development Association

If you are a growing manufacturing company in Yakima County, your business may be eligible for a credit on its B&O tax.

The tax incentive provides a $2,000 credit against the businesses B&O Tax for each new qualified employment position with annual wages and benefits of $40,000 or less; or a credit of $4,000 for each new employment position with wages and benefits of more than $40,000 annually.

To be granted the credit, the business’s average qualified employment positions at the specific facility must increase by at least 15 percent over the following four calendar quarters.

Example:

A manufacturing company with 98 employees is adding a new production line and anticipate increasing employment by an average of 15 full-time qualified employment positions. This will bring total employment to 113 positions. To be eligible for the tax credit the company must grow employment by fifteen percent which it did.

Ten of the new positions have wages and benefits that exceed $40,000 annually and the other five positions have wages and benefits less than $40,000 annually. This company can receive a tax credit of $50,000 – $4,000 for each of the ten positions created with wages and benefits greater than $40,000 and $2,000 for each of the five positions created with wages and benefits less than $40,000.

The Washington State Department of Revenue has created a simple two-page application that walks you through the process of determining if your business qualifies and applying. More information on this tax incentive can be found here or by contacting the Department of Revenue Taxpayer Account Administration Office at 360-902-7175.

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