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JLARC: Aluminum tax preferences now unused after smelter closures; auditors recommend expiry
Summary
JLARC reported that tax preferences created to benefit aluminum smelters have not been used since 2021 because all Washington smelters have closed; auditors recommended allowing expiring preferences to lapse and terminating others unlikely to be used again.
JLARC told the House Finance Committee on Jan. 14 that eight tax preferences aimed at Washington’s aluminum industry are no longer being used and several should be allowed to expire or be terminated because all aluminum smelters in the state have closed.
Pierce Van Moorsil (JLARC staff) said four preferences that explicitly benefit aluminum smelters are scheduled to expire July 1, 2027; the other four preferences do not have expiration dates. JLARC reported none of the preferences have been claimed since 2021 and found that six preferences cannot be used again if a new smelter opens while two are unlikely to be used.
The legislative auditor recommended allowing the four smelter-specific preferences to expire and terminating the other four preferences related to sellers of power to smelters and inputs such as anodes and cathodes. Committee members had no questions during the presentation.
JLARC’s recommendation reflects industry changes rather than a dispute over statutory intent: with no smelters operating in Washington, the previously intended beneficiaries no longer exist.
