Tax lure may be good for business
June 25, 2008 · Updated 4:15 PM
Whidbey Island might be the new hot spot for business if Senate Bill 5583 becomes law.
Sponsored by State Sen. Mary Margaret Haugen, D-Camono, the bill would give new Island County businesses special tax incentives to encourage them to locate in rural counties.
According to Sharon Hart, director of the Islands District Economic Development Council in Coupeville, whether or not the incentives would bring more money to Whidbey Island is debatable.
"It would be a case-by-case basis," Hart said. "It depends on which new businesses come here. It wouldn't be a direct payment to Island County."
In the past, Island County hasn't qualified as rural because it exceeds 100 people per square mile. Most of the county's population density is concentrated in Oak Harbor. If Haugen's measure passes, the definition of "rural" would include counties smaller than 125 square miles in size, which makes Island County eligible.
According to a spokesperson for Haugen's office, Washington state would lose $268,000 in revenue for the 2003-04 biennium if the bill passes, as well as another $77,000 in the next biennium.
According to a news release from Haugen's office, the senator has worked for three years to secure a rural designation for Island County. The release adds that SB 5583 gives six tax incentives: the software development business and occupation (B&O) tax credit; the help-desk services B&O tax credit; the economic development public utility tax credit; the manufacturing, research and development, and computer services tax deferral; the job creation B&O tax credit; and the job training B&O tax credit.
What can't be measured is the amount of revenue new business would bring, Hart said. The types of new businesses attracted to the county would determine whether funds would be generated back into Island County.
"The incentive is to attract companies," Hart said. "We were not able to compete with neighboring counties."
Hart said she hoped the economic impact will get investment back to Island County.
The bill will go to the House of Representatives for consideration. The 2003 legislative session is scheduled to end April 27.