Subject of Possible Rule Making: WAC 458-20-269 Tax adjustments for aerospace manufacturers and processors for hire.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300 and 82.01.060(2).

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: The department is considering a new rule to explain the tax adjustments available to manufacturers and processors for hire of commercial airplanes and components of such airplanes and to other eligible persons in the aerospace industry. These tax adjustments include:

•	A reduced business and occupation (B&O) tax rate;
•	A retail sales and use tax exemption for certain computer equipment;
•	A B&O tax credit for preproduction development expenditures; and
•	A B&O tax credit for property taxes or leasehold excise taxes paid on eligible property.

     This rule explains who is eligible for the tax adjustments, what are the tax adjustments, the documentation requirements for claiming the adjustment, and the annual report requirement for claiming the adjustment.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

     Process for Developing New Rule: Parties interested in this rule making may contact the individual listed below. The public may also participate by providing written comments throughout this rule making or giving oral testimony at the public meeting or public hearing.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary draft of the proposed changes is available upon request. Written comments on and/or requests for copies of the rule may be directed to Allan C. Lau, Interpretations and Technical Advice Division, P.O. Box 47453, Olympia, WA 98504-47453, phone (360) 570-6134, fax (360) 586-5543.

     Public Meeting Location: Capital Plaza Building, 4th Floor, Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on March 14, 2007, at 1:30 p.m.

     Assistance for Persons with Disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985 or (360) 725-7499.

February 6, 2007

Alan R. Lynn

Rules Coordinator

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