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New Washington Laws to Promote Rural High Tech

May 28, 1999

Washington's technology boom hasn't been enjoyed equally by most communities outside of the Seattle or Spokane urban areas. Two laws recently passed by the Washington legislature are intended to provide tax credits, infrastructure financing, and other incentives to spread the economic benefits of technology into the state's most rural counties.

House Bill 2260 grants 100 percent, seven-year Business & Occupation (B&O) tax credits to businesses in rural counties engaged in providing "help desk" technologies to other businesses. After the seventh year, the credit is reduced to 68 percent.

The bill also gives a $1,000 B&O credit for each new software manufacturing or software develop-ment job created by any business in rural counties. The credit may be applied each year for up to six years provided the job is maintained.

Final provisions of the bill provide a 50 percent utility tax credit for rural telecommunications and water facility projects, and allows rural counties to retain more of the state sales tax revenues collected to use for infrastructure projects, including telecommunications.

Senate Bill 5594 expands the use of state rural economic development funding to areas not eligible under former definitions of distressed areas, allowing rural communities to use state infrastructure loans and grants for telecommunications and other business expansion projects. The act also establishes a Rural Washington Loan Fund to distribute block grants for job-creating business projects in rural counties.

Rural counties, as defined by the two laws, are those with densities lower than 100 people per square mile. Thirty-two of the state's 39 counties fit the definition; 75 percent of Washington residents live in the remaining seven counties.

More information on the state' efforts to encourage rural high tech economic development can be found on the Web at http://access.wa.gov  

Washington