JLARC Citizen Commission approves updates to 2026 tax-preference review schedule

The Citizen Commission on Tax Preferences on May 7 approved updates to the panel's 2026 tax-preference review schedule, voting 4-0 to adopt staff recommendations that add eight tax preferences grouped into seven reviews and shift several items to alternate review lists.

The changes, presented by Pete Van Moorsel, staff to the Joint Legislative Audit and Review Committee (JLARC), add a mix of newly enacted and legislatively mandated reviews for 2026 and move others to the alternate list to balance workload and data availability. The motion passed on a roll call vote with Andy Noffsinger Meadows, Dr. Grant Forsyth, Dr. Sharon Kioko and James Orr voting aye.

JLARC staff said the proposed 2026 schedule includes a review of the Urban Data Centers tax preference, a sales-and-use tax exemption created in 2022 for purchases of computer server equipment and related power infrastructure. Staff noted that the Urban Data Centers preference is a pilot limited to counties with populations over 800,000 and that statute limits certificates to five per year, to a total of 30 during the pilot — factors driving the 2026 review timing. Pete Van Moorsel described the preference as separate from the rural data-center preference JLARC previously reviewed in 2016.

Other items on the proposed 2026 schedule included: B&O and public-utility-tax credits for contributions to Main Street programs intended to revitalize downtown and neighborhood commercial areas; a B&O credit for contributions to the Equitable Access to Credit program administered by the Department of Commerce; a sales-and-use tax exemption for nonresident large private airplanes used for modifications such as interior customizations (the Legislature directed a 2026 review); a sales-and-use tax exemption for landfill-gas processing equipment added to an existing anaerobic-digester preference; a sales-and-use tax exemption for automotive adaptive equipment for veterans and service members with disabilities; and a real-estate excise tax exemption for transfers by legal representatives of persons with developmental disabilities to qualified entities that provide housing services.

JLARC staff also proposed moving the Motion Picture Competitiveness Program off the full review list for 2026. Staff said Washington Filmworks, which administers that program, is still implementing statutory changes enacted in 2022 (including raising the annual funding cap from $3.5 million to $15 million and adding rural and equity spending requirements), and staff expects insufficient data for a meaningful 2026 review. House Bill 1372, passed in 2025, allows JLARC more flexibility to alter its work plan when data are not available, which staff cited as relevant to timing.

The commission’s packet and staff presentation list further schedule adjustments, including moving four preferences (two benefiting nonprofit sheltered workshops and two for adult family homes and nonprofit developmentally disabled housing) from the full review list to an alternate list. Van Moorsel said the commission’s statutory duty is to adopt a schedule that reviews all tax preferences at least once every 10 years while prioritizing preferences with statutory review directions, upcoming expirations, stated metrics, or available data that permit rigorous evaluation.

The motion to approve the updates was put forward and seconded during the meeting; staff conducted the roll-call vote and recorded four ayes and no nays. The commission will use the updated schedule to guide JLARC’s workplan for 2026 reviews.

Officials and staff who presented or were quoted in the meeting: Pete Van Moorsel, staff to JLARC; and commissioners Andy Noffsinger Meadows, Dr. Grant Forsyth, Dr. Sharon Kioko and James Orr.

The commission’s next organizational work on schedules will feed into a broader 10-year schedule development process that staff described later in the meeting.