How did Washington's lack of a corporate income tax influence Boeing's relocation decision?

1. Washington’s tax giveaways: the headline numbers and what they did

Washington’s 2013 aerospace package engineered steep reductions in Boeing’s state business taxes and other levies and has been characterized as an $8.7–$9 billion incentive over time; reporting shows the deal drove Boeing’s state business taxes down by an estimated 80–95% compared with what they would have been without the breaks ^{[1] [2] [3]}. Advocates framed the package as necessary to “maintain and grow” aerospace jobs in Washington; opponents say it was a sprawling, weakly enforced set of exemptions that primarily reduced Boeing’s tax burden ^{[1] [3]}.

2. Why tax structure matters: Washington’s lack of a conventional corporate income tax

Washington historically relied on a business-and-occupation (B&O) gross receipts-style tax rather than a conventional corporate income tax, and the 2013 changes included steep cuts and exemptions within that system that disproportionately benefited Boeing ^[3]. Analysts argue that a tax code built on narrow, project-specific exemptions — rather than broad, predictable rate changes — makes firms more likely to shop locations for the best bespoke package, a dynamic critics say contributed to Boeing’s mobility ^[4].

3. The promise vs. the payoff: clawbacks, accountability and job movement

When the incentives were sold to lawmakers, accountability measures were thin; several watchdog and policy groups warned that without strict clawbacks the state would lack recourse if Boeing moved work elsewhere — a warning that later reporting and analyses say proved prescient as Boeing reduced Washington employment and relocated engineering and production activity to states like South Carolina, Oklahoma and Missouri ^{[5] [6] [4]}. Journalistic coverage documents sharp job cuts after the deal, and lawmakers later debated stronger clawbacks and transparency ^{[1] [7]}.

4. Boeing’s strategic playbook: tradeoffs between incentives and corporate priorities

Reporting and industry accounts show Boeing negotiated aggressively for tax advantages and at times even supported repeal of particular breaks for strategic reasons (e.g., to blunt WTO complaints), demonstrating how the company uses tax policy as one lever among many in corporate siting decisions ^{[8] [9]}. At the same time, commentators note that once targeted exemptions expire or are constrained, Boeing has redeployed projects to other states that offered new incentives — underscoring that the presence or absence of a given tax preference can shift corporate calculations ^{[8] [4]}.

5. Competing interpretations: investment stimulus vs. subsidy failure

Supporters of Washington’s incentives argued the package was necessary to secure long-term manufacturing investment and protect a regional aerospace cluster ^[2]. Critics — including policy analysts and local opinion writers — argue the deals became a costly dependence on a single firm, that many of the jobs were fungible across sites, and that targeted incentives failed to prevent offshoring of work ^{[4] [5] [10]}. Both perspectives are present in the record: the state did win large near-term cost reductions for Boeing, but those concessions did not guarantee job permanence ^{[3] [4]}.

6. What policymakers learned and the reforms that followed

Following pushback, Washington lawmakers debated and in some cases passed changes to the aerospace tax regime — including limiting or repealing particular preferences to address WTO objections and public concern — and pursued greater transparency and proposals for clawbacks and accountability tied to incentives ^{[8] [5] [7]}. Observers say those reforms reflect an implicit admission that open-ended, highly specific tax giveaways created unintended incentives for relocation ^{[8] [5]}.

7. Bottom line for the original question

Available reporting shows Washington’s tax structure — a combination of a non-income tax base (B&O) and very large, targeted exemptions for aerospace — materially shaped Boeing’s bargaining leverage and relocation calculus: the state’s willingness to carve out steep tax advantages made Washington competitive in 2013, but the targeted, conditional nature of those breaks (and later limits or reversals) left jobs vulnerable and incentivized Boeing to move work where new incentives or lower costs appeared ^{[3] [4] [5]}. Sources do not provide a single causal sentence tying a specific tax provision to a single relocation decision; instead, they present a pattern in which tax incentives were a decisive factor among several that shaped Boeing’s location choices ^{[1] [4] [8]}.