Tacoma considering tax credit increase for clean energy, green companies

(The Center Square) – City officials are pitching a revision of the tax incentive for green jobs to more closely align with the Tacoma Green Economic Development Strategy, the city's plan for taking advantage of public and private sector efforts to decarbonize, including new businesses that provide meaningful work and create jobs by solving environmental problems.

The revisions go towards tax credits for companies working in the clean energy and green products sector. The revisions would allow companies making and selling components for eco-friendly products outside of Tacoma to be eligible for the credit. Products include components for electric and hydrogen vehicles, green buildings, and offshore windmills.

The credit per new family wage job created by an eligible company would increase from $250 per year to $1,000 per year for five years. The Tacoma ​​Community and Economic Development Department said the increase makes the tax credit a “much more attractive incentive.”

Businesses instituting green practices such as recycling or energy efficient upgrades that are eligible for other incentives would be removed from the credit.

According to a Tuesday presentation to the Tacoma Economic Development Committee, no companies performing these types of services have taken advantage of the credit.

The Tacoma ​​Community and Economic Development Department added that the tax credits would only go toward new hires. Currently, seven businesses actively use the green job credit. Since the credit first went into effect in 2018, 34 businesses have utilized it. Out of the 34 businesses, 18 had their credits expire in 2022 after the initial five years.

Businesses can only apply the tax credits toward the business and occupation tax. They are not able to receive more than their business and occupation tax obligation. The city has $500,000 in available job credits but the Tacoma Community and Economic Development Department said generally only about $200,000 to $300,000 is used every year.

Tacoma city staff intends to present this policy revision to the Government Performance and Finance Committee on Oct. 3. This committee oversees proposed changes to the city’s taxation policies and laws. If the Government Performance and Finance Committee approves the measure, the revisions would go before the full council consideration.