A Closely Guarded Secret: State Tax Bill For Boeing And Other Companies
By Austin Jenkins
Washington lawmakers recently rushed into special session to pass $8.7B in aerospace tax breaks. The aim: to land Boeing’s next generation 777 airplane. But how much does Boeing – or any other major company in Washington - pay in taxes? That’s actually a closely guarded secret. Now one state lawmaker wants to change that and a hearing is scheduled for Friday, Nov. 22.
Boeing is a company that you can look up on line and find out how much its quarterly profits are, what its stock price is, what sort of dividend it’s paying to its shareholders. But one data point you cannot find is how much this company pays in Washington state taxes. Beverly Crichfield says “We don’t disclose that information.”
Crichfield is a spokesperson for Washington’s Department of Revenue. She says taxpayer information is protected by Washington law.
Austin Jenkins: “Even when a company like Boeing is asking for a multi-year, multi-billion dollar tax benefit?” Beverly Crichfield: “That is correct.”
Of course, companies can always waive confidentiality. I asked Boeing to release its state taxes for the past three years. The answer back was no - no also to an interview on this subject. I got the same answer from Microsoft.
Photo: Washington lawmakers recently approved an additional $8.7B in tax breaks for Boeing, however the company won’t release its total state tax liability. Photo by Austin Jenkins.
Confidential taxpayer information is available to the governor and a few other elected officials. Democratic State Representative Reuven Carlyle is one of them. That’s because he chairs the House committee in charge of taxation. When I asked him how much Boeing pays in taxes.
Reuven Carlyle: “Under state statute I am prohibited from answering that question.”
Carlyle doesn’t much like having this proverbial piece of tape placed over his mouth.
Reuven Carlyle: “We don’t want to be punitive for companies, we don’t want to be reckless or irresponsible.”
But Carlyle believes lawmakers and the public deserve to know how much a company -like Boeing - pays in state taxes especially if that company comes to the legislature asking for special consideration in the tax code. Washington’s certainly not alone in guarding corporate tax information. Oregon and Idaho do the same. But in Wisconsin, anyone can fill out a form and request a company’s – even an individual’s – net tax information.
Amber Carter: “I think there needs to be really a level of caution with releasing specific company information.”
Amber Carter is a tax expert at the Association of Washington Business whose members include Boeing. She argues if tax incentives are crafted on the front end to ensure a return on investment, then how much a company pays in overall taxes becomes irrelevant.
Amber Carter: “We are very supportive of having data available to demonstrate the benefit of tax incentives, what we want to make sure though is that the confidentiality and trade secrets of those companies are protected.”
But Richard Pomp doesn’t buy the competition argument. He’s a law professor at the University of Connecticut and an expert on local taxation.
Richard Pomp: “When you are a publicly-held corporation receiving billions in tax expenditures you have no right to privacy at that point.”
Pomp notes that publicly traded companies already release reams of financial information to comply with federal regulations. So, what’s the motivation behind releasing a company’s tax bottom line? Pomp is blunt.
Richard Pomp: “You’ve got to put some names on it to get the public engaged the way it would if they learn that Boeing pays less taxes than they do.”
Of course, we don’t know what Boeing’s effective state tax rate is. Tax committee chair Reuven Carlyle plans to introduce corporate tax transparency legislation this January. He hopes to build on a law passed earlier this year that requires new levels of reporting when a company benefits from a specific tax break. As for the aerospace tax incentives just extended by the Washington legislature: we do know Boeing would be getting more than half off its bill for those particular taxes.
Washington’s tax disclosure law: http://apps.leg.wa.gov/RCW/default.aspx?cite=82.32.330