M&E Exemption: Investing in Washington's Future

As the state’s chamber of commerce and manufacturing and technology association, the Association of Washington Business is an advocate for employers of every size and type in communities from Aberdeen to Zillah. In today’s challenging economic times, it is essential to identify policies that enhance our global competitiveness, provide opportunities for capital investments and generate family-wage jobs. 

M&E Exemption Links

2008 M&E Study – Urbanchuk
2008 M&E Report

One policy that has had tremendous impact on Washington’s economy is the exemption from sales and use taxes on manufacturing machinery and equipment. This tax incentive, created by the Legislature in 1995, was designed to serve as a stimulus for investment in our state’s manufacturing industry and related businesses.

The good news is this exemption has significantly outperformed these expectations.

In its first 10 years, the exemption has added $81.5 billion to state coffers, generated more than $16.5 billion in income and created almost 285,000 new jobs.

This investment in Washington’s manufacturing sector has paid significant dividends and will continue to do so if continued beyond 2009. Research indicates the exemption will create 54,100 new jobs in Washington between now and 2016. Consequently, it is imperative that the Legislature retains this exemption, particularly in light of the economic challenges we face as a state and as a country.

The study reaffirms our support for the sales and use tax exemption for manufacturing machinery and equipment, research and development, and repairs and replacement parts. The impact of this policy on our member companies and the people of Washington underscores its value to the state’s competitiveness and economic prosperity.

For more information, contact Amber Carter at (360) 943-1600.