WTO rules on Washington State tax incentives that impact Boeing

Boeing has reported the World Trade Organization (WTO) has rejected all of the European Union´s challenges to six of the seven Washington state tax incentives, and rejected most of the challenge to the seventh incentive, the company said

The WTO held that a reduction in Washington state´s business and occupancy (B&O) tax rate for future 777X revenues is inconsistent with the WTO agreements. The WTO dismissed all of the EU´s other challenges to various incentive programs and left untouched the B&O tax rate as it applies to revenue from the other Boeing models produced in Washington state: the 737, 747, 767, 777 (current model) and 787.

In total, the EU claimed that Boeing had received USD8.7 billion in subsidies. This claim was rejected by the WTO, which found future incentives totaling no more than USD50 million a year to be impermissible. The WTO found that to date Boeing has received no benefit from the 777X rate incentive, and will not until 2020, because the first airplane will not be delivered until then.

Boeing said in light of the liability that the WTO has found against the EU and Airbus, it expects the EU and Airbus to appeal the decision.