U.S. Clears Bill Dropping Boeing Tax Break to Avoid EU Tariffs

U.S. Clears Bill Dropping Boeing Tax Break to Avoid EU Tariffs

Washington state’s House of Representatives approved a measure Wednesday evening that removes a crucial tax break for Boeing and other aerospace corporations, in an attempt to head off potential European tariffs on U.S. goods and loosen a transatlantic trade conflict over aircraft grants.

U.S. Clears Bill Dropping Boeing Tax Break to Avoid EU Tariffs

The measure passed 73-24 after winning clearance Tuesday in the Senate, a spokeswoman for House Democrats stated.

Nevertheless, late modifications to the legislation mean it should be put to another vote in the Senate before it can move to Washington state Governor Jay Inslee’s desk for approval.

The World Trade Organization (WTO) has found that Boeing and Europe’s Airbus, the world’s two largest plane manufacturers, received billions of dollars of unfair subsidies in cases dating back to 2004.

After years of discussions, the focus of the European case against the U.S. involves a preferential state tax rate for aerospace brought in 16 years ago and renewed in 2013 to help lure production work for Boeing’s 777X.

The planned law alterations would remove the 40% saving on Business and Occupation Tax, which saved Boeing about $118 million two years ago based on published jetliner earnings.

The USA in February contracted its own tariffs on planes constructed by Boeing’s arch-rival Airbus after winning approval in 2019 from the WTO to penalize European items over Airbus grants.

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