Washington State Taxes

Incentives & Programs

Qualifying manufacturers may defer sales tax associated with the construction of new manufacturing facilities.

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Manufacturers and processers purchasing qualified machinery and equipment are not required to pay local or state sales or use tax when the purchase is used directly for manufacturing or R&D.

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A $2,000 or $4,000 B&O tax credit is available for each new employment position created by a qualifying manufacturer in economically distressed areas.

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Qualifying distribution centers are eligible for a partial state sales tax exemption on the construction of a new warehouse distribution facility over 200,000 square feet.

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The Washington State Job Skills Program provides matching grants for customized job training. Customized job training programs are often developed in partnership with Grays Harbor College. The program requires a 50 percent matching investment from the company, which can include in-kind contributions.

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Local Public Corporations may issue tax-exempt IRBs on behalf of private companies. Because interest payments to IRB buyers are not subject to federal income tax, bonds can be sold at lower rates of interest. This reduces the cost of the project. Costs that may be included in IRB financing are property acquisition, machinery, and equipment, design, consulting, legal, accounting, and financing.

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Funding is available for qualifying public improvements and infrastructure. The fund is administered by Grays Harbor County and is only available to rural communities in Washington.

State grant and loan funding for public infrastructure improvements needed to serve business.

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The Port of Grays Harbor is designated as a US Foreign Trade Zone. In this zone, firms pay no tariffs on imported raw materials used to create products that are shipped overseas. If the manufactured products are sold in the US, companies only pay duties when the products are shipped and only on that portion of foreign materials that actually went into the product, not the waste. Foreign and domestic goods may be processed or stored without payment of customs duties and without being subject to other regulations normally applied to customs entries. Materials may be sorted, reassembled, repackaged, manipulated, processed, used in manufacturing, or stored in the Foreign Trade Zone.

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Grays Harbor County and its municipalities are committed to reducing the roadblocks and paperwork that stand in the way of private investment projects. Permits and licenses can usually be approved within 60-90 days from the time the company submits a completed application. Greater Grays Harbor, Inc can act as an intermediary for the company to assist and move the project along.
The federal Tax Cuts and Jobs Act of 2017 was signed into law on Dec. 22, 2017. The Opportunity Zone program was included in that act, which was designed to provide tax incentives to investors who fund businesses in underserved communities.

Investors can defer paying taxes on capital gains that are invested in distressed communities designated as Opportunity Zones by the governor of each state. Grays Harbor has three “Opportunity Zone” census tracts, which include parts of Aberdeen, Hoquiam, and the coast from Ocean Shores to Moclips. [Learn more] internal Opportunity Zones page.

The New Markets Tax Credit (NMTC) was designed to increase the flow of capital to businesses and low income communities by providing a modest tax incentive to private investors. Over the last ten years, the NMTC has proven to be an effective, targeted and cost-efficient financing tool valued by businesses, communities and investors across the country.

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Many businesses may qualify for several tax incentives offered by Washington. These incentives include deferrals, reduced B&O rates, exemptions, and credits.

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