Washington Governor Extends Tax Preferences to Support Semiconductor Industry

Washington Governor Signs Bill to Boost Semiconductor Industry and Potentially Attract Funding

Washington Governor Jay Inslee has signed a bill into law that extends tax preferences for the semiconductor industry, with hopes of stimulating growth and potentially drawing more federal funding. The legislation is seen as a crucial step in supporting the state's semiconductor industry.

Key Takeaways:

• House Bill 2428, signed into law by Governor Inslee, extended tax preferences for the semiconductor industry in Washington state, aiming to encourage growth and attract federal funding.
• The bipartisan CHIPS and Science Act, passed in 2022, had the goal of infusing $52 billion into the domestic semiconductor industry to maintain the country's competitiveness globally.
• The tax preferences provide incentives such as reduced business and occupation taxes and sales and use tax exemptions for manufacturers purchasing goods related to semiconductor production.
• Washington aims to demonstrate a "local match" to access CHIPS Act funds, with tax relief considered as a form of matched funds.
• The legislation supports existing semiconductor manufacturers and seeks to potentially draw more investment to the industry.

Analysis:

The bill's extension of tax preferences until 2034 provides predictability in the business environment, potentially attracting new businesses and supporting the growth and modernization of the semiconductor industry in Washington state. These incentives are crucial in helping the state compete for and access CHIPS Act funding.

Do You Know?

• The CHIPS Act: The bipartisan CHIPS and Science Act, aimed at infusing $52 billion into the domestic semiconductor industry to ensure the U.S. remains competitive globally.
• Local Match Requirement: States aiming to secure CHIPS Act funds must demonstrate a “local match,” with tax relief being considered as a form of matched funds.

This legislation underscores Washington's commitment to supporting the semiconductor industry and maximizing opportunities for growth and development in the state.