Citizens Commission adopts consolidated comments on tax preference reviews, flags reporting issues for Legislature

The Citizens Commission for Performance Measurement of Tax Preferences voted Oct. 21 to adopt consolidated commissioner comments on a package of tax preference reviews and will forward those comments to the Washington State Legislature.

Chair Nelson Ramirez opened the discussion of consolidated comments, explaining that green items indicated agreement, yellow signaled some variation and red would indicate an inability to reach consensus. After brief discussion and two recusals by Commissioner Grant Forsyth on natural-gas-related items, commissioners approved the reconciled language for most recommendations and voted on several grouped motions.

"My participation really is only to ask clarifying questions on your comments, and I don't vote on them," Representative Jerry Paulette, ex officio member and chair of JLARC, said during the meeting, underscoring his role as a nonvoting clarifier on procedural and factual points.

Key votes and motions

- The commission approved the minutes of its Sept. 22, 2025 meeting by roll-call vote (aye: Andy Knobsinger Meadows; Grant Forsyth; Scott Edwards; Dr. Sharon Kyoko; James Orr). The motion passed.

- Commissioners voted to adopt commissioner comments for recommendation numbers 1, 2 and 17 (recommendation 2 concerns natural gas for transportation and recommendation 17 concerns energy sales to silicon smelters). Commissioner Grant Forsyth recused himself from this specific vote; roll call recorded four ayes and the motion passed.

- The commission adopted the reconciled comment for recommendation 3 (a natural-gas-related item focusing on reporting) by roll call; the motion passed with four ayes.

- Commissioners approved a package of green items'recommendations 4 through 12 and 14 through 16'by roll call with five ayes.

- The commission adopted a reconciled endorsement with comment for recommendation 13 (initially listed as yellow) by roll call with five ayes.

Reporting requirements and liquefied natural gas

Commissioners and JLARC staff spent notable time clarifying how reporting requirements are currently structured and how changing the requirement would affect the Legislature's ability to measure program use. JLARC staff explained that the machinery-and-equipment sales-and-use tax exemption currently carries an annual tax-performance reporting requirement, but that reporters often submitted no natural-gas volumes in those returns because the exemption applied at the time the equipment was purchased rather than when fuel was produced or sold.

"This recommendation would shift that reporting requirement from the sales and use tax exemption on machinery and equipment to the public utility tax exemption," JLARC staff said, adding that applying the reporting requirement to the public utility tax exemption would capture data about volumes actually produced and sold as transportation fuel. The commission's reconciled language asks the Legislature to consider the Department of Revenue work group's findings on taxing liquefied natural gas and to weigh whether the existing benefit should remain at its current level (a 90% exemption, as recorded in JLARC's summary) or be adjusted.

Nonprofit reporting burden and timing

Several commissioners pressed for greater clarity and sensitivity to reporting burden on small nonprofit beneficiaries. Commissioners noted that some nonprofit organizations have limited staff and high turnover, which can make compiling annual historical data difficult. The commission added a sentence to the consolidated comments asking the Legislature to consider the burden reporting requirements impose on nonprofits when setting timelines and performance metrics.

Veterans preference use and visibility

Commissioners discussed a veterans-related tax preference that had very low use in JLARC's review. Staff reported fewer than three beneficiaries claimed the tax preference during the review period and said one possible reason was that a federal VA grant can cover sales tax on housing adaptation in some cases, though that federal grant is annually capped and may not cover all costs in all cases. Commissioners recommended increasing visibility for veterans tax preferences and clarified that staff could not definitively attribute underuse to any single cause.

Process notes, recusals and next steps

Commissioners handled recusals explicitly: Commissioner Grant Forsyth recused himself from votes involving natural-gas-related items and rejoined for subsequent votes. Where commissioners had minor language edits, the chair reconciled comments on the record and the commission voted on consolidated language as a package.

The commission invited members of the public to submit written testimony on agenda items following the meeting; staff provided an email and a mailing address for JLARC. No in-person public testimony was offered at the meeting.

The commission concluded by thanking JLARC staff for their support and setting the next meeting for May 6, 2026, at 10 a.m.

Votes at a glance

- Approval of Sept. 22, 2025 meeting minutes: passed (roll-call) - Adopted commissioner comments for recommendations 1, 2 and 17: passed (Grant Forsyth recused; vote 4-0) - Adopted commissioner comment for recommendation 3: passed (vote 4-0) - Adopted consolidated green items (recommendations 4'12 and 14'16): passed (vote 5-0) - Adopted reconciled comment for recommendation 13 (yellow->endorsed with comment): passed (vote 5-0)

Clarifying details and limits of record

- JLARC staff said the liquefied natural gas exemption currently reflected a 90% tax benefit for marine use; the exemption's level and expiration status were discussed and the commission recommended the Legislature consider the Department of Revenue work group's findings before adopting any implementation. - Staff stated the machinery-and-equipment sales-and-use tax exemption carries the existing annual reporting requirement, and that shifting the requirement to the public utility tax exemption would capture production/sales volumes. - Staff reported fewer than three beneficiaries claimed the veterans housing-adaptation preference during JLARC's review period; the federal VA grant may offset sales tax in some situations but is capped by Congress and therefore not always sufficient.

Sources and quotes in this report come from the meeting transcript and on-the-record staff comments recorded during the Oct. 21, 2025 meeting of the Citizens Commission for Performance Measurement of Tax Preferences.