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Published on Friday, January 31, 2014

Extending the annexation sales tax credit

On Monday, the House Local Government Committee will hear HB 2681, extending the annexation sales tax credit to annexations commencing by January 1, 2017.

Cities in King, Pierce, or Snohomish counties that annex an area of at least 10,000 population are currently allowed to retain 0.2 percent of the state’s sales tax generated in the city to fund the cost of extending city services to the annexed area. Current law requires an annexation to commence by January 1, 2015, to be eligible. HB 2681 extends eligibility for the credit by an additional two years.

The bill also allows the credit to be used for the cost of preparing for the annexation in addition to extending services to the new area.

Categories: Budget & finance