The state of Washington has designated 139 census tracts as Qualified Opportunity Zones. These areas represent the underserved communities in the state of Washington as defined by low income and poverty rates. These zones were nominated by the CEO of U.S. Territories in addition to the Washington governor. Washington has opportunity zones in multiple cities and counties and here is a breakdown of the most concentrated areas:
The city of Seattle is located in King County, which nominated 23 census tracts as opportunity zones.
The 11 locations include tracts in the downtown area, Medical District, Lower South Hill and a portion of West Plains.
Tacoma received the majority of opportunity zones while Portland features three.
Opportunity Zones were introduced by the U.S. government in an effort to reinvent communities that are struggling with economic distress. This is intended to be accomplished by offering capital gains tax incentives on private investments. Those who choose to invest in an area labeled as an opportunity zone are eligible to receive numerous tax breaks and benefits. The opportunity zones are determined by identifying areas with low median income and high poverty rates.
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Washington Tax Situation
The tax situation in the state of Washington is not considered to be among the best for its residents. The state levies a 6.5 percent sales tax, which is compounded by local sales tax. That combination often equates to sales tax that is upwards of 9 percent. There is no personal state income tax in Washington, although that lack of taxes is made up in other areas. This is one of the reasons for the high sales tax.
Tax rates for low-income residents vary throughout the state and they are particularly tough on Seattle residents. Meanwhile, residents in the city of Yakima are faced with much lower tax rates. Part of the reason as to do with property in Seattle as home values are very high. Washington ranks 29thin the nation in highest property taxes, but it is the value of homes in Seattle that impact taxes.
In states without a personal income tax, there are other ways for the state to find funding. Washington now relies on its marijuana tax for a sizeable part of its funding. There is a 37 percent tax on the sale of recreational marijuana in the state of Washington. The state also collects taxes on the sale of liquor and that translates to more than $100 million on an annual basis.
WA Industries with Tax Breaks
Tax breaks in Washington are provided to numerous industries, although there are some that benefit more than others. These tax incentives have helped to make Washington the home of some major American corporations. Here is a look at some of the industries that have utilized Washington’s tax breaks.
This is one of the most frequently-used tax incentive programs in the state of Washington.
There is a large conglomerate of technology giants now headquartered in Washington.
Washington has five popular tax break programs used by companies in this industry.
There are a half-dozen tax incentive programs in this industry that are extremely beneficial to companies.
These endeavors are popular in the state of Washington as it is a state with an environmentally conscious business sector.
There is also a vast amount of green initiatives that include favorable tax breaks and they are not limited to one industry. Washington features a range of industries that are eligible to claim tax benefits. This has developed into a successful community of commerce within the state.
Washington State Financial Facts
The cost of living in the state of Washington fluctuates according to location. The city of Seattle has a living cost that is much higher than the national average but that does not apply to all of Washington. Here is a look at some meaningful financial facts about the state of Washington:
- Median household income – $61,062
- Median household savings
- $0 in savings: 32%
- $1,000 or less in savings: 45%
- $10,000 or more in savings: 35%
- Total household investments
64 percent of families that own their home
Median value of Washington home – $345,200
Current economic condition of Washington
The state of Washington has one of the top economies in the country. In many reports, it ranks at No.1 or No.2 and features a lot of upward trends. The labor market continues to grow, and median wages continue to increase. The average wage per week in Washington now registers at $1,168 and its 4.3 percent GDP is among the highest of any state in the country.
The fact that the home base of Amazon and Microsoft are now located in Washington speaks volumes about the economy. Positive tax incentives have helped lure major corporations to the state and that’s had a trickle-down effect.
The marijuana taxes have been very sizeable, but they have also been put to good use, aiding in public health and education. The formula for success begun before the 2009 financial crisis and was evident in Washington’s Priorities of Government (POG) process. This initiative took a look at budgeting and prioritized it accordingly. The government was able to utilize that plan to escape the peril of the recession that hindered many other states. The elimination of certain programs and the appropriate budget cuts helped Washington during that volatile time.
Primary Industries in Washington
Industry in Washington is multi-faceted, and the booming economy has made it a popular place for companies and corporations. The success of those industries has helped create new jobs every year and is a major reason for the state’s economic success. Here is a look at the state’s top industries:
Opportunity Zones in Washington
Washington has eight Fortune 500 companies in Seattle alone, and that includes industry giants like Amazon, Starbucks, Costco and Microsoft. However, the entire state is not as fortunate as there are some areas experiencing an economic downturn. Here is a list of the areas which have census tracts that are now qualified as opportunity zones:
- Benton (2)
- Chelan (3)
- Clallam (10)
- Clark (7)
- Cowlitz (2)
- Ferry (3)
- Grays Harbor (3)
- Jefferson (4)
- King (23)
- Kitsap (3)
- Kittitas (2)
- Klickitat (2)
- Lewis (2)
- Mason (2)
- Okanogan (4)
- Pacific (3)
- Pend Oreille (2)
- Pierce (12)
- Skagit (5)
- Skamania (3)
- Snohomish (7)
- Spokane (11)
- Stevens (2)
- Thurston (4)
- Walla Walla (2)
- Whatcom (3)
- Yakima (4)
Not every part of Washington is flourishing economically. Northeast Washington features a host of counties that are struggling economically. Just north of Spokane, Pend Oreille County, Stevens County and Ferry County all have economic problems. The unemployment rate for Ferris Count is just under 10 percent as it is an area that never seemed to recover from the last financial crisis. But those struggles predated that recession as unemployment numbers were doubled in the aforementioned counties during the 1990s. The introduction of opportunity zones is one step in an attempt to help those counties catch up to the rest of the state. It is no coincidence that Pierce County has the second-highest number of opportunity zones in the state. Through capital tax gains incentives, there is a new means of attempting to rejuvenate these economically distressed areas.
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