Tax Abatement for Solar Manufacturers

Senate Bill 5111, signed by Washington's governor in May 2005, created a reduced business and occupation (B&O) tax rate for Washington manufacturers of solar-electric (photovoltaic) modules, stirling converters, or silicon components of those systems.

In May 2009, Washington enacted SB 6170, effective July 1, 2009. This bill reduced the B&O tax rate to 0.275%, effective October 1, 2009. This tax rate is 43% lower than the standard manufacturing B&O tax rate. This reduced tax rate applies to manufacturers of photovoltaic modules, stirling converters, solar grade silicon, silicon solar wafers, silicon solar cells, thin film solar devices or compound semiconductor solar wafers to be used exclusively in solar energy systems. Originally, stirling converters were not included in this tax abatement, but Senate Bill 5526, effective in July 2011, extended the abatement to stirling converters.

Businesses claiming the credit under this program are required to file annual tax surveys with the Washington Department of Revenue (DOR), detailing employment, wages, and health and retirement benefits. The DOR compiled the information provided in these surveys in a report to the Washington State Legislature in November 2013. This incentive was originally scheduled to expire on June 30, 2014, but was extended to June 30, 2017 by SB 5882 of 2013.