Tax Credit for Forest Derived Biomass

WA Industry Recruitment/Support commercial industrial

Administered by: Washington State Department of Revenue

Quick Summary

This tax credit is not available to homeowners. It applies only to businesses that manufacture wood biomass fuel from forest residues and other lignocellulosic feedstocks, with a reduced B&O tax rate of 0.138 percent on manufacturing income until January 1, 2029.

AI-generated summary • Updated 7/12/2026

Program Details

Program ID: 5550
Last Updated: 2/17/2023

Eligibility

Eligible Sectors

commercial industrial

Eligible Technologies

biomass

Program Summary

Note: The B&O tax credit for forest-derived biomass expires January 1, 2029.

If you manufacture wood biomass fuel, report the income under Manufacturing of Wood Biomass Fuel B&O tax classification. The tax rate is 0.138 percent. Wood biomass fuel means a liquid or gaseous fuel produced from lignocellulosic feedstocks, including wood, forest, field residue, and dedicated energy crops. The term does not include wood treated with chemical preservatives.

Contact & Resources

Additional Resources

https://dor.wa.gov/taxes-rates/tax-incentives/tax-incentive-programs#Energy

Please verify current program details with the administering agency before making any financial decisions.