Protecting property owners from an unfair wind and solar tax shift

If there was one positive thing that came out of this year’s legislative session in Olympia, it was the passage of House Bill 1960.

As most of you are aware, several industrial wind and solar projects are currently being proposed here in Lincoln County. Regardless of where someone stands on the philosophy of “green” energy, there is one huge problem that should concern everyone. While these developments can significantly increase the tax base, under Washington’s current tax structure, they end up shifting a large portion of the tax burden onto the rest of the property owners within that taxing district. House Bill 1960, which is currently awaiting the Governor’s signature, corrects that problem.

In Washington State, these facilities are taxed as personal property rather than real property. Personal property assets are depreciated over a specified number of years, and in the case of industrial wind and solar facilities, that depreciation can happen fairly quickly. As the taxable value of that equipment declines, the taxes that were once paid by that project do not simply disappear. They are shifted onto the rest of the taxpayers within that taxing district.

In other words, as the taxable value of a large industrial wind or solar project drops over time, homeowners, farmers, and local businesses are forced to pick up a larger share of the tax burden, simply because that facility exists in the county.

Recognizing this inherent flaw in the system, the Washington State Association of Counties (WSAC) set out to address how our state taxes large wind and solar facilities. I had the opportunity to serve on a working group formed over a year ago that included a broad spectrum of interests on both sides of the issue, along with legislators who were willing to acknowledge the problem and work toward a solution. We met many times, in an effort to hash out an approach that would do no harm to the industry or to local government.

We had one goal: protect local property owners from unfairly paying higher taxes simply because an industrial wind or solar project exists in their county.

Under House Bill 1960, these projects will no longer be subject to personal property tax that depreciates over time. Instead, they will pay an excise tax, based not on how much energy they produce, but rather on how much they are capable of producing, as measured by their nameplate megawatt capacity.

This change protects local property owners from tax shifts when large renewable energy projects depreciate. It also provides stable and predictable revenue for counties and local taxing districts and creates greater certainty for both communities and energy developers regarding long-term tax obligations.

Issues like this never get fixed unless people are willing to recognize a problem and work together to solve it. I appreciate the many county officials, legislators, and stakeholders who helped make this solution possible, and I was proud to be part of the effort. House Bill 1960 ensures that local homeowners, farmers, and small businesses will not be forced to pay higher taxes simply because an industrial wind or solar project exists in their county.