Boeing asks lawmakers to suspend preferential tax rate

OLYMPIA, Wash. -- Washington state lawmakers say they will introduce bills, at The Boeing Co.’s request, to suspend the aerospace giant's preferential business and occupation tax rate until the United States and European Union resolve their long-running international trade dispute.

The legislation will suspend the 40% tax break that the Legislature adopted for the aerospace industry in 2003 and expanded in 2013.

Last year, the World Trade Organization body ruled Boeing received an illegal U.S. tax break from Washington state that damaged sales by European archrival Airbus.

The decision by the WTO’s appellate body considered whether the United States had complied with a 2012 ruling that found that plane-maker and defense company Boeing received at least $5 billion in subsidies prohibited under international trade rules.

But the ruling was limited and the decision found no grounds upon which the European bloc could seek damages from an arbitrator, except for the relatively small Washington state tax program — which the U.S. says was worth $100 million a year.

In a statement, Boeing spokesman Bryan Watt said Wednesday that the company advocated for and supports the legislative action to “resolve the sole finding against the United States in the long-running trade disputes between Europe and the United States over government support for the production of large commercial airplanes."

"This legislation demonstrates the commitment of Washington — and of the United States — to fair and rules-based trade, and to compliance with the WTO’s rulings,” he said.