Panel takes aim at state tax breaks

OLYMPIA – A special panel is recommending the Washington Legislature end three tax breaks and review eight others the state offers to various businesses or consumer groups.

The Joint Legislative Audit and Review Committee suggests the state could bring in nearly $44 million if it allows tax breaks on hog fuel used to produce energy and on renewable energy machinery to expire as scheduled this year. An exemption for goods repaired in Washington but delivered to other states should be terminated but it wouldn’t actually bring in any money, the committee said.

That $44 million is a relatively small sum compared to the state’s two-year general fund budget of about $32 billion. But the committee said the Legislature should review some more lucrative tax breaks to see if they should be allowed to continue.

Among those are tax exemptions on some types of aircraft fuel, which could bring the state as much as $300 million, and the business and occupation tax on interest on real estate loans, possibly worth as much as $172 million for the next two years.

The largest tax break the committee recommended continuing is the sales tax exemption for purchases some out-of-state residents get when shopping in Washington. If discontinued, it would bring in an estimated $58 million over two years to the state.

The end of tax exemptions – often called loopholes by opponents – was a heated topic during the past session’s budget debates, with liberals arguing they should be closed before programs or services were cut. Very few exemptions were ended, however.