The northwestern U.S. state ofWashington's economy grew 3.7% in 2016, nearly two and a half times the national rate. Average income per head in 2009 was $41,751, 12th among states of the U.S.
The United States' largest concentration ofSTEM (science, technology, engineering and math) workers reside in Washington state. The state has a large volume of seaborne foreign trade with Asia. Leading economic sectors are government, real estate and rental leasing, and information; manufacturing comes fourth (8.6% of the state'sGDP). Fruit and vegetable production, andhydroelectric power, are other important sectors. Important firms based in Washington includeStarbucks,Amazon,Costco, andMicrosoft.
Washington does not levy a personalincome tax, but raises revenue throughsales tax,property tax, and agross receipts tax on businesses.
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The state of Washington is one of only seven states that does not levy a personalincome tax. The state also does not collect acorporate income tax orfranchise tax. However, Washington businesses are responsible for various other state levies. One tax Washington charges on most businesses is thebusiness and occupation tax (B & O), agross receipts tax which charges varying rates for different types of businesses.[citation needed]
Washington's state basesales tax is 6.5 percent which is combined with a local sales tax which varies by locality. The combined state and local retail sales tax rates increase the taxes paid by consumers, depending on the variable local sales tax rates, generally between 7.5 and 10 percent.[1] As of March 2017, the combined sales tax rate in Seattle and Tacoma was 10.1 percent.[2] The cities ofLynnwood andMill Creek have the highest sale tax rate in the state at 10.4 percent.[2] These taxes apply to services as well as products.[3] Most foods are exempt from sales tax; however, prepared foods,dietary supplements andsoft drinks remain taxable.
An "ex" applies to certain select products such asgasoline,cigarettes, andalcoholic beverages.Property tax was the first tax levied in the state of Washington and its collection accounts for about 30% of Washington's total state and local revenue. It continues to be the most important revenue source forpublic schools, fire protection,libraries,parks and recreation, and other special-purpose districts.
Allreal property andpersonal property is subject to tax unless specifically exempted by law. Personal property also is taxed, although most personal property owned by individuals is exempt.Personal property tax applies to personal property used when conducting business or to other personal property not exempt by law. All property taxes are paid to the county treasurer's office where the property is located. Washington does not impose a tax on assets such asbank accounts,stocks orbonds. Neither does the state assess any tax on retirement income earned and received from another state. Washington does not collectinheritance taxes; however, theestate tax is decoupled from the federal estate tax laws, and therefore the state imposes its own estate tax.
Theper capita personal income in 2009 was $41,751, 12th in the nation.[4]
Several notable billionaires includingBill Gates, technology advisor and former Chairman & CEO ofMicrosoft, live in the state. Other state billionaires includeSteve Ballmer (Microsoft),Craig McCaw (McCaw Cellular Communications),James Jannard (Oakley),Howard Schultz (Starbucks), andCharles Simonyi (Microsoft).[5][6]
Significant amounts of trade withAsia pass through the ports of thePuget Sound. Washington is the fourth largest exporting state in the United States, afterNew York,California, andTexas.
The ports of Washington handle 8% of all American exports and receive 6% of the nation's imports.[7]
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Key businesses within the state include the design and manufacture of jetaircraft (Boeing), computersoftware development (Microsoft,Nintendo of America,Valve), online retailers (Amazon,Expedia, Inc.),electronics,biotechnology,aluminum production, lumber and wood products (Weyerhaeuser),mining, and tourism.[citation needed]
AFortune magazine survey of the top 20 most admired companies in the US included four Washington-based companies:Starbucks,Microsoft,Costco andNordstrom.[8]
Washington was one of eighteen states which had agovernment monopoly on sales of alcoholic beverages, althoughbeer andwine with less than 20% alcohol by volume could be purchased inconvenience stores andsupermarkets.Liqueurs (even if under 20% alcohol by volume) and spirits could only be purchased in state-run or privately owned-state-contractedliquor stores.[9] This however was overturned by 2011's Initiative 1183 which ceased state-run liquor stores as of June 1, 2012.[10]
Washington is a leadingagricultural state. (The following figures are from the Washington State Office of Financial Management[11] and theUSDA,National Agricultural Statistics Service,Washington Field Office). For 2003, the total value of Washington's agricultural products was $5.79 billion, the 11th highest in the country. The total value of its crops was $3.8 billion, the 7th highest. The total value of its livestock and specialty products was $1.5 billion, the 26th highest. In 2010, the total value of the crops was $7.93 billion.[12]
In 2004, Washington ranked first in the nation in production of redraspberries (90.0% of totalU.S. production), wrinkled seedpeas (80.6%),hops (75.0%),spearmint oil (73.6%),apples (58.1%), sweetcherries (47.3%),pears (42.6%),peppermint oil (40.3%),Concord grapes (39.3%),carrots for processing (36.8%), andNiagara grapes (31.6%). Washington also ranked second in the nation in production oflentils, fallpotatoes, dry edible peas,apricots,grapes (all varieties taken together),asparagus (over a third of the nation's production),sweet corn for processing, and green peas for processing; third in tartcherries,prunes andplums, and dry summeronions; fourth inbarley andtrout; and fifth inwheat,cranberries, andstrawberries.
The apple industry is of particular importance to Washington. Because of the favorable climate of dry, warm summers and cold winters ofCentral Washington, the state has led the U.S. in apple production since the 1920s.[13] Two areas inEastern Washington – theYakima River valley and theWenatchee River valley – account for the vast majority of the state's apple crop.[14] TheWashington Apple Commission regulates the industry.
Washington is the leading producer ofhydroelectric power in the U.S. Hydroelectricity makes up over half of electricity state's electric generation and nearly 35% of its total energy consumption.[15]
Employment by industry in Washington[16]
| Industry | Employment thousands March 2013 | Percent of total employment |
|---|---|---|
| Trade, transportation and utilities | 548.2 | 18.84% |
| Government | 540.9 | 18.59% |
| Education and health services | 392.2 | 13.4% |
| Professional and business services | 352.0 | 12.10% |
| Manufacturing | 288.0 | 9.90% |
| Leisure and hospitality | 281.7 | 9.65% |
| Financial activities | 142.3 | 4.89% |
| Other services | 112.4 | 3.86% |
| Information | 104.7 | 3.60% |
| Mining, logging and construction | 6.1 | 0.21% |
| Total | 2,909.5 | 100% |
At $43 billion,real estate and rental leasing forms 12.14% of total GDP in Washington. (see above)
On December 4, 2016Bloomberg compared the cost of housingbetweenVancouver,British Columbia andSeattle. There has been a 50 per cent increase inhome prices inSeattle in the past five years, but the median home value is still less than inSan Francisco andLos Angeles. As inVancouver some of the increase in home prices is attributed toChinese investors.[17][18] On December 9, 2016,The Seattle Times mentioned proposedlegislation to allow more and larger mother-in-law apartments and backyard cottages in neighborhoodszoned forsingle-family houses inSeattle.[19]
