Industries supported in Washington include aerospace, agriculture, information and communications technology, life sciences, and military and defense. Washington was ranked number 2 by U.S. News & World Report in their list of best states.
Reasons for doing business in Washington State
To encourage job growth and innovation, Washington offers an array of tax incentives (credits, deferrals, exemptions, and rate reductions) to businesses in high-growth sectors. Some of the industries that have specific tax incentive programs are aerospace, data centers, high tech, and biofuel, just to name a few.
In addition, the workforce in Washington is both diverse and highly educated. According to the Washington State Department of Commerce, one in three residents has a bachelor's degree or higher.
Geographic location is another factor. Washington is a leading export hub, providing access to important global markets. The state ranks number one in aerospace exports. Top export markets for food and agricultural goods include Canada, East Asia, and Mexico.
What is the cost of business in Washington State?
Washington does not have a corporate income tax, but it does have a gross receipts tax (business and occupation or “B&O” tax) that varies depending on the business activity or classification. And although Washington does not have an individual income tax, it does have a 7% capital gains income tax. In March 2023, the Washington State Supreme Court reversed a decision from a lower court that had declared the capital gains tax as unconstitutional.
The cost of living in Washington State is also higher than in most states. For this category, CNBC gave Washington State a D- grade in its top states report.
What is Washington State’s infrastructure rating?
In its last infrastructure report card from the American Society of Civil Engineers, Washington received a C. CNBC also gave Washington a C for its infrastructure.
What are the other challenges of doing business in Washington State?
Despite being ranked as one of the top states overall for doing business, Washington received a C for business friendliness from CNBC. CNBC bases the score on how well a state provides a “legal and regulatory framework that does not overburden business”.