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JLARC: Aluminum tax preferences unused after smelter closures; recommends allowing expirations and terminations

2112203 · January 14, 2025

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Summary

JLARC reported that Washington’s tax preferences for aluminum smelters have not been used since 2021 because all in-state smelters closed, and recommended letting expiring preferences lapse and terminating others that are unlikely to be used.

Pete Van Moorsil, JLARC staff, told the House Finance Committee on Jan. 14 that eight tax preferences benefiting the aluminum industry show no use since 2021. Four preferences set to expire July 1, 2027, benefit aluminum smelters; the other four (for companies selling power to smelters, and for use of anodes/cathodes and master alloy producers) have no expiration dates.

JLARC found all Washington aluminum smelters have closed and therefore the four smelter-specific preferences cannot reasonably be used again; two of the other four preferences are unlikely to be used even if a new smelter opened, according to JLARC’s legal and administrative review. As a result, JLARC recommended the Legislature allow the four smelter-specific preferences to expire as scheduled and terminate the other four preferences that are unused and unlikely to be needed.

Committee members had no further questions on the presentation. JLARC’s recommendation was presented to the committee to inform potential statutory cleanup or budget adjustments in the 2025 legislative session.