Transportation resources

AN ACT Relating to transportation resources; amending RCW 1
82.38.030, 82.08.817, 82.12.818, 82.08.9999, 82.48A.010, 82.48A.020, 2
and 70A.205.405; amending 2025 c 417 s 1406 (uncodified); reenacting 3
and amending RCW 46.68.090, 82.08.020, and 82.12.020; providing 4
effective dates; and declaring an emergency. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
PART I: MOTOR VEHICLE FUEL TAX7
Sec. 101. RCW 82.38.030 and 2025 c 417 s 101 are each amended to 8
read as follows: 9
(1) There is levied and imposed upon fuel licensees a tax at the 10
rate of 23 cents per gallon of fuel. 11
(2) Beginning July 1, 2003, an additional and cumulative tax rate 12
of five cents per gallon of fuel is imposed on fuel licensees. This 13
subsection (2) expires when the bonds issued for transportation 2003 14
projects are retired. 15
(3) Beginning July 1, 2005, an additional and cumulative tax rate 16
of three cents per gallon of fuel is imposed on fuel licensees.17
(4) Beginning July 1, 2006, an additional and cumulative tax rate 18
of three cents per gallon of fuel is imposed on fuel licensees.19
H-3243.1
HOUSE BILL 2711
State of Washington 69th Legislature 2026 Regular Session
By Representative Fey
Read first time 02/02/26. Referred to Committee on Transportation.
p. 1 HB 2711
(5) Beginning July 1, 2007, an additional and cumulative tax rate 1
of two cents per gallon of fuel is imposed on fuel licensees.2
(6) Beginning July 1, 2008, an additional and cumulative tax rate 3
of one and one-half cents per gallon of fuel is imposed on fuel 4
licensees. 5
(7) Beginning August 1, 2015, an additional and cumulative tax 6
rate of seven cents per gallon of fuel is imposed on fuel licensees.7
(8) Beginning July 1, 2016, an additional and cumulative tax rate 8
of four and nine-tenths cents per gallon of fuel is imposed on fuel 9
licensees. 10
(9) Beginning July 1, 2025, an additional and cumulative tax rate 11
of six cents per gallon of fuel is imposed on fuel licensees.12
(10) Beginning July 1, 2025, an additional and cumulative tax 13
rate of three cents per gallon of special fuel is imposed on fuel 14
licensees. 15
(11) Beginning July 1, 2027, an additional and cumulative tax 16
rate of three cents per gallon of special fuel is imposed on fuel 17
licensees. 18
(12)(((a))) Beginning July 1, 2026, ((the fuel tax rates imposed 19
under subsections (1) through (9) of this section must be increased 20
annually by two percent and the resulting fuel tax rate must be 21
rounded to the nearest one-thousandth of $1.22
(b))) an additional and cumulative tax rate per gallon of fuel is 23
imposed on fuel licensees. The tax rate imposed under this subsection 24
is calculated each July 1st by:25
(a) Increasing by two percent the sum of:26
(i) The fuel tax rates imposed under subsections (1) through (9) 27
of this section as of the current July 1st; and28
(ii) The fuel tax rate imposed under this subsection (12) for the 29
prior 12 months;30
(b) Subtracting the sum of the fuel tax rates imposed under 31
subsections (1) through (9) of this section as of the current July 32
1st; and33
(c) Rounding the result to the nearest one-thousandth of $1.34
(13) Beginning July 1, 2028, ((the fuel tax rate imposed under 35
subsections (10) and (11) of this section must be increased annually 36
by two percent and the resulting fuel tax rate must be rounded to the 37
nearest one-thousandth of $1.38
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(13))) an additional and cumulative tax rate per gallon of 1
special fuel is imposed on fuel licensees. The tax rate imposed under 2
this subsection is calculated each July 1st by:3
(a) Increasing by two percent the sum of:4
(i) The fuel tax rates imposed under subsections (1) through (11) 5
of this section as of the current July 1st; and6
(ii) The fuel tax rates imposed under subsection (12) of this 7
section and this subsection for the prior 12 months;8
(b) Subtracting the sum of the fuel tax rates imposed under 9
subsections (1) through (12) of this section as of the current July 10
1st; and11
(c) Rounding the result to the nearest one-thousandth of $1.12
(14) Taxes are imposed when: 13
(a) Fuel is removed in this state from a terminal if the fuel is 14
removed at the rack unless the removal is by a licensed supplier or 15
distributor for direct delivery to a destination outside of the 16
state, or the removal is by a fuel supplier for direct delivery to an 17
international fuel tax agreement licensee under RCW 82.38.320;18
(b) Fuel is removed in this state from a refinery if either of 19
the following applies: 20
(i) The removal is by bulk transfer and the refiner or the owner 21
of the fuel immediately before the removal is not a licensed 22
supplier; or 23
(ii) The removal is at the refinery rack unless the removal is to 24
a licensed supplier or distributor for direct delivery to a 25
destination outside of the state, or the removal is to a licensed 26
supplier for direct delivery to an international fuel tax agreement 27
licensee under RCW 82.38.320; 28
(c) Fuel enters into this state for sale, consumption, use, or 29
storage, unless the fuel enters this state for direct delivery to an 30
international fuel tax agreement licensee under RCW 82.38.320, if 31
either of the following applies: 32
(i) The entry is by bulk transfer and the importer is not a 33
licensed supplier; or 34
(ii) The entry is not by bulk transfer; 35
(d) Fuel enters this state by means outside the bulk transfer-36
terminal system and is delivered directly to a licensed terminal 37
unless the owner is a licensed distributor or supplier;38
(e) Fuel is sold or removed in this state to an unlicensed entity 39
unless there was a prior taxable removal, entry, or sale of the fuel;40
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(f) Blended fuel is removed or sold in this state by the blender 1
of the fuel. The number of gallons of blended fuel subject to tax is 2
the difference between the total number of gallons of blended fuel 3
removed or sold and the number of gallons of previously taxed fuel 4
used to produce the blended fuel; 5
(g) Dyed special fuel is used on a highway, as authorized by the 6
internal revenue code, unless the use is exempt from the fuel tax;7
(h) Dyed special fuel is held for sale, sold, used, or is 8
intended to be used in violation of this chapter; 9
(i) Special fuel purchased by an international fuel tax agreement 10
licensee under RCW 82.38.320 is used on a highway; and11
(j) Fuel is sold by a licensed fuel supplier to a fuel 12
distributor or fuel blender and the fuel is not removed from the bulk 13
transfer-terminal system. 14
Sec. 102. RCW 46.68.090 and 2025 c 417 s 103 and 2025 c 416 s 15
706 are each reenacted and amended to read as follows:16
(1) All moneys that have accrued or may accrue to the motor 17
vehicle fund from the fuel tax must be first expended for purposes 18
enumerated in (a) and (b) of this subsection. The remaining net tax 19
amount must be distributed monthly by the state treasurer in 20
accordance with subsections (2) through (9) of this section.21
(a) For payment of refunds of fuel tax that has been paid and is 22
refundable as provided by law; 23
(b) For payment of amounts to be expended pursuant to 24
appropriations for the administrative expenses of the offices of 25
state treasurer, state auditor, and the department of licensing of 26
the state of Washington in the administration of the fuel tax, which 27
sums must be distributed monthly. 28
(2) All of the remaining net tax amount collected under RCW 29
82.38.030(1) must be distributed as set forth in (a) through (j) of 30
this subsection. 31
(a) For distribution to the motor vehicle fund an amount equal to 32
44.387 percent to be expended for highway purposes of the state as 33
defined in RCW 46.68.130; 34
(b)(i) For distribution to the special category C account, hereby 35
created in the motor vehicle fund, an amount equal to 3.2609 percent 36
to be expended for special category C projects. Special category C 37
projects are category C projects that, due to high cost only, will 38
require bond financing to complete construction. 39
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(ii) The following criteria, listed in order of priority, must be 1
used in determining which special category C projects have the 2
highest priority: 3
(A) Accident experience; 4
(B) Fatal accident experience; 5
(C) Capacity to move people and goods safely and at reasonable 6
speeds without undue congestion; and 7
(D) Continuity of development of the highway transportation 8
network. 9
(iii) Moneys deposited in the special category C account in the 10
motor vehicle fund may be used for payment of debt service on bonds 11
the proceeds of which are used to finance special category C projects 12
under this subsection (2)(b); 13
(c) For distribution to the Puget Sound ferry operations account 14
in the motor vehicle fund an amount equal to 2.3283 percent;15
(d) For distribution to the Puget Sound capital construction 16
account in the motor vehicle fund an amount equal to 2.3726 percent;17
(e) For distribution to the transportation improvement account in 18
the motor vehicle fund an amount equal to 7.5597 percent;19
(f) For distribution to the transportation improvement account in 20
the motor vehicle fund an amount equal to 5.6739 percent and expended 21
in accordance with RCW 47.26.086; 22
(g) For distribution to the cities and towns from the motor 23
vehicle fund an amount equal to 10.6961 percent in accordance with 24
RCW 46.68.110; 25
(h) For distribution to the counties from the motor vehicle fund 26
an amount equal to 19.2287 percent: (i) Out of which there must be 27
distributed from time to time, as directed by the department of 28
transportation, those sums as may be necessary to carry out the 29
provisions of RCW 47.56.725; and (ii) less any amounts appropriated 30
to the county road administration board to implement the provisions 31
of RCW 47.56.725(4), with the balance of such county share to be 32
distributed monthly as the same accrues for distribution in 33
accordance with RCW 46.68.120; 34
(i) For distribution to the county arterial preservation account, 35
hereby created in the motor vehicle fund an amount equal to 1.9565 36
percent. These funds must be distributed by the county road 37
administration board to counties in proportions corresponding to the 38
number of paved arterial lane miles in the unincorporated area of 39
each county and must be used for improvements to sustain the 40
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structural, safety, and operational integrity of county arterials. 1
The county road administration board must adopt reasonable rules and 2
develop policies to implement this program and to assure that a 3
pavement management system is used. During the 2025-2027 fiscal 4
biennium, the county arterial preservation account may also be used 5
for staffing-related expenses of the board, contracting costs, and 6
grants associated with bridge ratings; 7
(j) For distribution to the rural arterial trust account in the 8
motor vehicle fund an amount equal to 2.5363 percent and expended in 9
accordance with RCW 36.79.020. 10
(3) The remaining net tax amount collected under RCW 82.38.030(2) 11
must be distributed to the transportation 2003 account (nickel 12
account). 13
(4) The remaining net tax amount collected under RCW 82.38.030(3) 14
must be distributed as follows: 15
(a) 8.3333 percent must be distributed to the incorporated cities 16
and towns of the state in accordance with RCW 46.68.110;17
(b) 8.3333 percent must be distributed to counties of the state 18
in accordance with RCW 46.68.120; and 19
(c) The remainder must be distributed to the transportation 20
partnership account created in RCW 46.68.290. 21
(5) The remaining net tax amount collected under RCW 82.38.030(4) 22
must be distributed as follows: 23
(a) 8.3333 percent must be distributed to the incorporated cities 24
and towns of the state in accordance with RCW 46.68.110;25
(b) 8.3333 percent must be distributed to counties of the state 26
in accordance with RCW 46.68.120; and 27
(c) The remainder must be distributed to the transportation 28
partnership account created in RCW 46.68.290. 29
(6) The remaining net tax amount collected under RCW 82.38.030 30
(5) and (6) must be distributed to the transportation partnership 31
account created in RCW 46.68.290. 32
(7) The remaining net tax amount collected under RCW 82.38.030 33
(7) and (8) must be distributed to the connecting Washington account 34
created in RCW 46.68.395. 35
(8) The remaining net tax amount collected under RCW 82.38.030 36
(9) through (((12))) (13) must be distributed as follows:37
(a) Two and one-half percent must be distributed to the 38
incorporated cities and towns of the state in accordance with RCW 39
46.68.110; 40
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(b) Two and one-half percent must be distributed to counties of 1
the state in accordance with RCW 46.68.120; and 2
(c) The remainder must be distributed to the motor vehicle fund 3
created in RCW 46.68.070. 4
(9) Nothing in this section or in RCW 46.68.130 may be construed 5
so as to violate any terms or conditions contained in any highway 6
construction bond issues now or hereafter authorized by statute and 7
whose payment is by such statute pledged to be paid from any excise 8
taxes on fuel. 9
PART II: MOTOR VEHICLE SALES AND LUXURY TAXES10
Sec. 201. RCW 82.08.020 and 2025 c 418 s 3 and 2025 c 417 s 201 11
are each reenacted and amended to read as follows:12
(1) There is levied and collected a tax equal to six and five-13
tenths percent of the selling price on each retail sale in this state 14
of: 15
(a) Tangible personal property, unless the sale is specifically 16
excluded from the RCW 82.04.050 definition of retail sale;17
(b) Digital goods, digital codes, and digital automated services, 18
if the sale is included within the RCW 82.04.050 definition of retail 19
sale; 20
(c) Services, other than digital automated services, included 21
within the RCW 82.04.050 definition of retail sale;22
(d) Extended warranties to consumers; and 23
(e) Anything else, the sale of which is included within the RCW 24
82.04.050 definition of retail sale. 25
(2)(a) There is levied and collected an additional tax on each 26
retail car rental, regardless of whether the vehicle is licensed in 27
this state, equal to: 28
(i) Eleven and nine-tenths percent of the selling price from 29
January 1, 2026, through December 31, 2026; and 30
(ii)(A) Nine and nine-tenths percent of the selling price 31
beginning January 1, 2027. 32
(B) The revenue collected under (a) of this subsection must be 33
deposited in the multimodal transportation account created in RCW 34
47.66.070. 35
(b)(i) Beginning January 1, 2027, there is levied and collected 36
an additional tax on peer-to-peer car sharing transactions equal to 37
the selling price multiplied by the rate of tax imposed under (a) of 38
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this subsection. This subsection (2)(b) applies only to peer-to-peer 1
car sharing transactions where the vehicle owner obtained the shared 2
vehicle as a vehicle for resale using a reseller permit or an 3
approved exemption certificate under RCW 82.04.470. The revenue 4
collected under this subsection (2)(b) must be deposited in the 5
multimodal transportation account created in RCW 47.66.070.6
(ii) For purposes of this subsection (2)(b), "peer-to-peer car 7
sharing" has the same meaning as in RCW 46.74A.010. "Peer-to-peer car 8
sharing" does not mean: 9
(A) "Retail car rental" as defined in RCW 82.08.011; or10
(B) "Rental car" as defined in RCW 46.04.465 or 48.115.005.11
(3) There is levied and collected an additional tax of five-12
tenths of one percent of the selling price on each retail sale of a 13
motor vehicle in this state, other than retail car rentals taxed 14
under subsection (2) of this section. The revenue collected under 15
this subsection must be deposited in the multimodal transportation 16
account created in RCW 47.66.070. 17
(4)(a) Beginning July 1, 2026, in addition to taxes required 18
under this chapter and chapters 82.12 and 82.49 RCW, there is levied 19
and collected an additional tax of five-tenths of one percent on the 20
selling price, plus trade-in property of like kind, for purchased 21
recreational vessels. 22
(b) In the case of a lease requiring periodic payments, the tax 23
is imposed on the ((fair market)) value of the recreational vessel at 24
the inception of the lease. 25
(c) The revenue collected under this subsection must be deposited 26
in the multimodal transportation account created in RCW 47.66.070.27
(d) For purposes of this subsection ((, "recreational )) (4), the 28
following definitions apply:29
(i) "Fair market value" has the same meaning as "value of the 30
article used" in RCW 82.12.010.31
(ii) "Recreational vessel" means a vessel as defined in RCW 32
88.02.310 that is subject to watercraft excise tax under chapter 33
82.49 RCW. 34
(iii) "Value of the recreational vessel" means the fair market 35
value of the recreational vessel plus the value of trade-in property 36
of like kind.37
(5) For purposes of subsection (3) of this section, "motor 38
vehicle" has the meaning provided in RCW 46.04.320, but does not 39
include: 40
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(a) Farm tractors or farm vehicles as defined in RCW 46.04.180 1
and 46.04.181, unless the farm tractor or farm vehicle is for use in 2
the production of cannabis; 3
(b) Off-road vehicles as defined in RCW 46.04.365;4
(c) Nonhighway vehicles as defined in RCW 46.09.310; and5
(d) Snowmobiles as defined in RCW 46.04.546. 6
(6) Beginning on December 8, 2005, 0.16 percent of the taxes 7
collected under subsection (1) of this section must be dedicated to 8
funding comprehensive performance audits required under RCW 9
43.09.470. The revenue identified in this subsection must be 10
deposited in the performance audits of government account created in 11
RCW 43.09.475. 12
(7) Beginning July 1, 2027, the portion of taxes collected by the 13
state under subsection (1) of this section equal to 0.1 percent of 14
the selling price on each retail sale in this state must be deposited 15
in the multimodal transportation account created in RCW 47.66.070.16
(8) The taxes imposed under this chapter apply to successive 17
retail sales of the same property. 18
(9) The rates provided in this section apply to taxes imposed 19
under chapter 82.12 RCW as provided in RCW 82.12.020.20
Sec. 202. RCW 82.12.020 and 2025 c 418 s 4 and 2025 c 417 s 202 21
are each reenacted and amended to read as follows:22
(1) There is levied and collected from every person in this state 23
a tax or excise for the privilege of using within this state as a 24
consumer any: 25
(a) Article of tangible personal property acquired by the user in 26
any manner, including tangible personal property acquired at a casual 27
or isolated sale, and including by-products used by the manufacturer 28
thereof, except as otherwise provided in this chapter, irrespective 29
of whether the article or similar articles are manufactured or are 30
available for purchase within this state; 31
(b) Prewritten computer software, regardless of the method of 32
delivery, but excluding prewritten computer software that is either 33
provided free of charge or is provided for temporary use in viewing 34
information, or both; 35
(c) Services defined as a retail sale in RCW 82.04.050 (2) (a) or 36
(g) or (6)(((c))) (b), excluding services defined as a retail sale in 37
RCW 82.04.050(6)(((c))) (b) that are provided free of charge;38
(d) Extended warranty; or 39
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(e)(i) Digital good, digital code, or digital automated service, 1
including the use of any services provided by a seller exclusively in 2
connection with digital goods, digital codes, or digital automated 3
services, whether or not a separate charge is made for such services.4
(ii) With respect to the use of digital goods, digital automated 5
services, and digital codes acquired by purchase, the tax imposed in 6
this subsection (1)(e) applies in respect to: 7
(A) Sales in which the seller has granted the purchaser the right 8
of permanent use; 9
(B) Sales in which the seller has granted the purchaser a right 10
of use that is less than permanent; 11
(C) Sales in which the purchaser is not obligated to make 12
continued payment as a condition of the sale; and 13
(D) Sales in which the purchaser is obligated to make continued 14
payment as a condition of the sale. 15
(iii) With respect to digital goods, digital automated services, 16
and digital codes acquired other than by purchase, the tax imposed in 17
this subsection (1)(e) applies regardless of whether or not the 18
consumer has a right of permanent use or is obligated to make 19
continued payment as a condition of use. 20
(2) The provisions of this chapter do not apply in respect to the 21
use of any article of tangible personal property, extended warranty, 22
digital good, digital code, digital automated service, or service 23
taxable under RCW 82.04.050 (2) (a) or (g) or (6)(((c))) (b), if the 24
sale to, or the use by, the present user or the present user's bailor 25
or donor has already been subjected to the tax under chapter 82.08 26
RCW or this chapter and the tax has been paid by the present user or 27
by the present user's bailor or donor. 28
(3)(a) Except as provided in this section, payment of the tax 29
imposed by this chapter or chapter 82.08 RCW by one purchaser or user 30
of tangible personal property, extended warranty, digital good, 31
digital code, digital automated service, or other service does not 32
have the effect of exempting any other purchaser or user of the same 33
property, extended warranty, digital good, digital code, digital 34
automated service, or other service from the taxes imposed by such 35
chapters. 36
(b) The tax imposed by this chapter does not apply:37
(i) If the sale to, or the use by, the present user or his or her 38
bailor or donor has already been subjected to the tax under chapter 39
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82.08 RCW or this chapter and the tax has been paid by the present 1
user or by his or her bailor or donor; 2
(ii) In respect to the use of any article of tangible personal 3
property acquired by bailment and the tax has once been paid based on 4
reasonable rental as determined by RCW 82.12.060 measured by the 5
value of the article at time of first use multiplied by the tax rate 6
imposed by chapter 82.08 RCW or this chapter as of the time of first 7
use; 8
(iii) In respect to the use of any article of tangible personal 9
property acquired by bailment, if the property was acquired by a 10
previous bailee from the same bailor for use in the same general 11
activity and the original bailment was prior to June 9, 1961; or12
(iv) To the use of digital goods or digital automated services, 13
which were obtained through the use of a digital code, if the sale of 14
the digital code to, or the use of the digital code by, the present 15
user or the present user's bailor or donor has already been subjected 16
to the tax under chapter 82.08 RCW or this chapter and the tax has 17
been paid by the present user or by the present user's bailor or 18
donor. 19
(4)(a) Except as provided in (b) of this subsection (4) and in 20
subsection (7)(a) of this section , the tax is levied and must be 21
collected in an amount equal to the value of the article used, value 22
of the digital good or digital code used, value of the extended 23
warranty used, or value of the service used by the taxpayer, 24
multiplied by the applicable rates in effect for the retail sales tax 25
under RCW 82.08.020. 26
(b) In the case of a seller required to collect use tax from the 27
purchaser, the tax must be collected in an amount equal to the 28
purchase price multiplied by the applicable rate in effect for the 29
retail sales tax under RCW 82.08.020. 30
(5) Beginning July 1, 2027, the portion of taxes collected by the 31
state under subsection (1) of this section equal to 0.1 percent of 32
the value of the article used, value of the digital good or digital 33
code used, value of the extended warranty used, or value of the 34
service used by the taxpayer, must be deposited in the multimodal 35
transportation account created in RCW 47.66.070. 36
(6) For purposes of the tax imposed in this section, "person" 37
includes anyone within the definition of "buyer," "purchaser," and 38
"consumer" in RCW 82.08.010. 39
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(7)(a) Beginning July 1, 2026, the tax imposed in this section at 1
the rate provided in RCW 82.08.020(4) applies to the use of a 2
recreational vessel at the time that it is first used in this state 3
by the consumer. The tax must be collected in an amount equal to the 4
sum of the selling price and the value of trade-in property of like 5
kind, multiplied by the applicable rate in effect for the retail 6
sales tax under RCW 82.08.020(4).7
(b) The revenue collected under this subsection must be deposited 8
in the multimodal transportation account created in RCW 47.66.070.9
(c) For purposes of this subsection, "recreational vessel" means 10
a vessel as defined in RCW 88.02.310 that is subject to watercraft 11
excise tax under chapter 82.49 RCW. 12
Sec. 203. RCW 82.08.817 and 2025 c 417 s 203 are each amended to 13
read as follows: 14
(1)(a) Except as provided in subsection (3) of this section, in 15
addition to the taxes imposed under RCW 82.08.020, there is levied 16
and collected an additional tax of eight percent on the sale of a 17
motor vehicle if: 18
(i) The selling price of the motor vehicle plus trade-in property 19
of like kind for purchased vehicles exceeds $100,000; or20
(ii) In the case of a lease requiring periodic payments, the 21
((fair market )) value of the motor vehicle exceeds $100,000 at the 22
inception of the lease. 23
(b) The additional tax imposed in this subsection (1):24
(i) Is equal to the portion of the selling price plus trade-in 25
property of like kind for purchased vehicles in excess of the 26
deduction amount specified in subsection (2) of this section, 27
multiplied by eight percent; or 28
(ii) In the case of a lease requiring periodic payments, is the 29
((fair market )) value of the motor vehicle in excess of the amount 30
specified in subsection (2) of this subsection, at the inception of 31
the lease, multiplied by eight percent. 32
(2) The deduction amount is $100,000 for fiscal year 2026. The 33
deduction amount must be annually adjusted on July 1st of each year 34
by increasing the amount by two percent and rounding the result to 35
the nearest whole dollar. 36
(3) The taxes imposed under this section do not apply to the sale 37
or lease of: 38
(a) A commercial motor vehicle, as defined in RCW 46.25.010; or39
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(b) A motor vehicle that has a gross vehicle weight rating of 1
greater than 10,000 pounds other than motor homes, as defined in RCW 2
46.04.305. 3
(4) The revenue collected under this section must be deposited in 4
the multimodal transportation account created in RCW 47.66.070.5
(5) For the purposes of this section and RCW 82.12.818, the 6
following definitions apply: 7
(a) "Fair market value" has the same meaning as "value of the 8
article used" in RCW 82.12.010.9
(b) "Motor vehicle" has the same meaning as in RCW 46.04.320, but 10
does not include: 11
(i) Farm tractors or farm vehicles as defined in RCW 46.04.180 12
and 46.04.181, unless the farm tractor or farm vehicle is for use in 13
the production of cannabis; 14
(ii) Off-road vehicles as defined in RCW 46.04.365;15
(iii) Nonhighway vehicles as defined in RCW 46.09.310; and16
(iv) Snowmobiles as defined in RCW 46.04.546. 17
(((b))) (c) "Value of the motor vehicle" means the fair market 18
value of the motor vehicle ((. In the case of a leased motor vehicle 19
in which the consumer is required to make periodic lease payments, 20
"value of the motor vehicle" means the fair market value of the motor 21
vehicle at the inception of the lease )) plus the value of trade-in 22
property of like kind. 23
Sec. 204. RCW 82.12.818 and 2025 c 417 s 204 are each amended to 24
read as follows: 25
(1) Except as provided in subsection (3) of this section, in 26
addition to the tax imposed under RCW 82.12.020, there is levied and 27
collected from every person in this state a tax for the privilege of 28
using within this state as a consumer any motor vehicle if the value 29
of the motor vehicle exceeds $100,000. 30
(2)(a) Except as provided in (b) of this subsection, the tax is 31
levied and must be collected in an amount equal to the value of the 32
motor vehicle that exceeds the deduction amount specified in (c) of 33
this subsection, multiplied by eight percent. 34
(b) In the case of a seller required to collect use tax under 35
this section from the purchaser, the tax must be collected in an 36
amount equal to ((the amount of the purchase price that exceeds )) 37
eight percent of the remainder that results when the amount specified 38
in (c) of this subsection ((, multiplied by eight percent )) is 39
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deducted from the sum of the selling price and the value of trade-in 1
property of like kind. 2
(c) The deduction amount is $100,000 for fiscal year 2026. The 3
deduction amount must be annually adjusted on July 1st of each year 4
by increasing the amount by two percent and rounding the result to 5
the nearest whole dollar. 6
(3) The taxes imposed under this section do not apply to the use 7
of: 8
(a) A commercial motor vehicle, as defined in RCW 46.25.010; or9
(b) A motor vehicle that has a gross vehicle weight rating of 10
greater than 10,000 pounds other than motor homes, as defined in RCW 11
46.04.305. 12
(4) The revenue collected under this section must be deposited in 13
the multimodal transportation account created in RCW 47.66.070.14
(5) For the purposes of this section, "value of the motor 15
vehicle" means the same as in RCW 82.08.817.16
Sec. 205. RCW 82.08.9999 and 2022 c 182 s 305 are each amended 17
to read as follows: 18
(1) Beginning August 1, 2019, with sales made or lease agreements 19
signed on or after the qualification period start date:20
(a) The tax levied by RCW 82.08.020 does not apply as provided in 21
(b) of this subsection to sales or leases of new or used passenger 22
cars, light duty trucks, and medium duty passenger vehicles that:23
(i) Are exclusively powered by a clean alternative fuel; or24
(ii) Use at least one method of propulsion that is capable of 25
being reenergized by an external source of electricity and are 26
capable of traveling at least 30 miles using only battery power; and27
(iii)(A) Have a vehicle selling price plus trade-in property of 28
like kind for purchased vehicles that: 29
(I) For a vehicle that is a new vehicle at the time of the 30
purchase date or the date the lease agreement was signed, does not 31
exceed $45,000; or 32
(II) For a vehicle that is a used vehicle at the time of the 33
purchase date or the date the lease agreement was signed, does not 34
exceed $30,000; or 35
(B) Have a fair market value at the inception of the lease for 36
leased vehicles that: 37
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(I) For a vehicle that is a new vehicle at the time of the 1
purchase date or the date the lease agreement was signed, does not 2
exceed $45,000; or 3
(II) For a vehicle that is a used vehicle at the time of the 4
purchase date or the date the lease agreement was signed, does not 5
exceed $30,000; 6
(b)(i) The exemption in this section is applicable for up to the 7
amounts specified in (b)(ii) or (iii) of this subsection of:8
(A) The total amount of the vehicle's selling price, for sales 9
made; or 10
(B) The total lease payments made plus any additional selling 11
price of the leased vehicle if the original lessee purchases the 12
leased vehicle before the qualification period end date, for lease 13
agreements signed. 14
(ii) Based on the purchase date or the date the lease agreement 15
was signed of the vehicle if the vehicle is a new vehicle at the time 16
of the purchase date or the date the lease agreement was signed:17
(A) From the qualification period start date until July 31, 2021, 18
the maximum amount eligible under (b)(i) of this subsection is 19
$25,000; 20
(B) From August 1, 2021, until July 31, 2023, the maximum amount 21
eligible under (b)(i) of this subsection is $20,000;22
(C) From August 1, 2023, until July 31, 2025, the maximum amount 23
eligible under (b)(i) of this subsection is $15,000.24
(iii) If the vehicle is a used vehicle at the time of the 25
purchase date or the date the lease agreement was signed, the maximum 26
amount eligible under (b)(i) of this subsection is $16,000.27
(2) The seller must keep records necessary for the department to 28
verify eligibility under this section. A person claiming the 29
exemption must also submit itemized information to the department for 30
all vehicles for which an exemption is claimed that must include the 31
following: Vehicle make; vehicle model; model year; whether the 32
vehicle has been sold or leased; date of sale or start date of lease; 33
length of lease; sales price for purchased vehicles and fair market 34
value at the inception of the lease for leased vehicles; and the 35
total amount qualifying for the incentive claimed for each vehicle, 36
in addition to the future monthly amount to be claimed for each 37
leased vehicle. This information must be provided in a form and 38
manner prescribed by the department. 39
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(3)(a) The department of licensing must maintain and publish a 1
list of all vehicle models qualifying for the tax exemptions under 2
this section or RCW 82.12.9999 until the expiration date of this 3
section, and is authorized to issue final rulings on vehicle model 4
qualification for these criteria. A seller is not responsible for 5
repayment of the tax exemption under this section and RCW 82.12.9999 6
for a vehicle if the department of licensing's published list of 7
qualifying vehicle models on the purchase date or the date the lease 8
agreement was signed includes the vehicle model and the department of 9
licensing subsequently removes the vehicle model from the published 10
list, and, if applicable, the vehicle meets the qualifying criterion 11
under subsection (1)(a)(iii)(B) of this section and RCW 12
82.12.9999(1)(a)(iii)(B). 13
(b) The department of revenue retains responsibility for 14
determining whether a vehicle meets the applicable qualifying 15
criterion under subsection (1)(a)(iii)(B) of this section and RCW 16
82.12.9999(1)(a)(iii)(B). 17
(4) By the last day of October 2019, and every six months 18
thereafter until ((this section expires )) October 31, 2025 , based on 19
the best available data, the department must report the following 20
information to the transportation committees of the legislature: The 21
cumulative number of vehicles that qualified for the exemption under 22
this section and RCW 82.12.9999 by month of purchase or lease start 23
and vehicle make and model; the dollar amount of all state retail 24
sales and use taxes exempted on or after the qualification period 25
start date, under this section and RCW 82.12.9999; and estimates of 26
the future costs of leased vehicles that qualified for the exemption 27
under this section and RCW 82.12.9999. 28
(5) The definitions in this subsection apply throughout this 29
section unless the context clearly requires otherwise.30
(a) "Clean alternative fuel" means natural gas, propane, 31
hydrogen, or electricity, when used as a fuel in a motor vehicle that 32
meets the California motor vehicle emission standards in Title 13 of 33
the California Code of Regulations, effective January 1, 2019, and 34
the rules of the Washington state department of ecology.35
(b) "Fair market value" has the same meaning as "value of the 36
article used" in RCW 82.12.010. 37
(c) "New vehicle" has the same meaning as "new motor vehicle" in 38
RCW 46.04.358. 39
(d) "Qualification period end date" means August 1, 2025.40
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(e) "Qualification period start date" means August 1, 2019.1
(f) "Used vehicle" has the same meaning as in RCW 46.04.660.2
(6)(a) Sales of vehicles delivered to the buyer or leased 3
vehicles for which the lease agreement was signed after the 4
qualification period end date do not qualify for the exemption under 5
this section. 6
(b) All leased vehicles that qualified for the exemption under 7
this section before the qualification period end date must continue 8
to receive the exemption as described under subsection (1)(b) of this 9
section on any lease payments due through the remainder of the lease 10
before August 1, 2028. 11
(7) This section expires August 1, 2028. 12
(8) This section is supported by the revenues generated in RCW 13
46.17.324, and therefore takes effect only if RCW 46.17.324 is 14
enacted by June 30, 2019. 15
PART III: LUXURY TAXES ON AIRCRAFT16
Sec. 301. RCW 82.48A.010 and 2025 c 417 s 207 are each amended 17
to read as follows: 18
(1)(a) In addition to taxes required under chapters 82.08, 82.12, 19
and 82.48 RCW, there is levied and collected an additional 10 percent 20
luxury aircraft tax on the retail sale of a noncommercial aircraft 21
if: 22
(i) The selling price of the noncommercial aircraft plus trade-in 23
property of like kind for purchased aircraft exceeds $500,000; or24
(ii) In the case of a lease requiring periodic payments, the 25
((fair market)) value of the noncommercial aircraft exceeds $500,000 26
at the inception of the lease. 27
(b) The additional tax imposed in this subsection only applies to 28
the portion of the sum of the selling price plus trade-in property of 29
like kind in excess of $500,000, or in the case of a lease requiring 30
periodic payments, the ((fair market )) value of the noncommercial 31
aircraft in excess of $500,000 at the inception of the lease.32
(2) For purposes of this section, (("noncommercial)) the 33
following definitions apply:34
(a) "Fair market value" has the same meaning as "value of the 35
article used" in RCW 82.12.010.36
(b) "Noncommercial aircraft" means any aircraft as defined in RCW 37
82.48.010, but does not include: 38
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(((a))) (i) Aircraft exempt from taxes under RCW 82.48.100; and1
(((b))) (ii) "Commercial airplane" as defined in RCW 82.32.550.2
(c) "Retail sale" and "selling price" have the same meaning as in 3
RCW 82.08.010.4
(d) "Value of the noncommercial aircraft" means the fair market 5
value of the noncommercial aircraft plus the value of trade-in 6
property of like kind.7
Sec. 302. RCW 82.48A.020 and 2025 c 417 s 208 are each amended 8
to read as follows: 9
(1)(a) In addition to taxes required under chapters 82.08, 82.12, 10
and 82.48 RCW, there is levied and collected from every person in 11
this state a tax for the privilege of using within this state as a 12
consumer any noncommercial aircraft if the value of the noncommercial 13
aircraft exceeds $500,000. 14
(b) The tax is levied and must be collected in an amount equal to 15
the value of the noncommercial aircraft that exceeds $500,000, 16
multiplied by 10 percent. 17
(2) The tax imposed in this section does not apply if the sale 18
to, or the use by, the present user or his or her bailor or donor has 19
already been subjected to the tax under this section or RCW 20
82.48A.010 and the tax has been paid by the present user or by his or 21
her bailor or donor. 22
(3) The tax imposed in this section does not apply in respect to 23
the use by a nonresident of Washington of a noncommercial aircraft, 24
which is registered or licensed under the laws of the state of his or 25
her residence. 26
(4) For the purposes of this section, (("value")) the following 27
definitions apply:28
(a) "Consumer" has the same meaning as in RCW 82.08.010.29
(b) "Fair market value" has the same meaning as "value of the 30
article used" in RCW 82.12.010.31
(c) "Noncommercial aircraft" has the same meaning as in RCW 32
82.48A.010.33
(d) "Use" and "using" have the same meaning as in RCW 82.12.010.34
(e) "Value of the noncommercial aircraft" means the fair market 35
value of the noncommercial aircraft ((. In the case of a leased 36
noncommercial aircraft in which the consumer is required to make 37
periodic lease payments, "value" of the aircraft means the fair 38
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market value of the aircraft at the inception of the lease )) plus the 1
value of trade-in property of like kind. 2
PART IV: MISCELLANEOUS3
Tow Truck Impounds4
Sec. 401. 2025 c 417 s 1406 (uncodified) is amended to read as 5
follows: 6
Sections 1307 through 1309 of this act take effect ((February 1, 7
2026)) July 1, 2027. 8
Tire Disposal Fee9
Sec. 402. RCW 70A.205.405 and 2025 c 417 s 301 are each amended 10
to read as follows: 11
(1) There is levied a $5 per tire fee on the retail sale of new 12
replacement vehicle tires. The fee imposed in this section must be 13
paid by the buyer to the seller, and each seller shall collect from 14
the buyer the full amount of the fee. The fee collected from the 15
buyer by the seller less the ((ten percent )) amount retained by the 16
seller as provided in RCW 70A.205.430(1) must be paid to the 17
department of revenue in accordance with RCW 82.32.045.18
(2) The department of revenue shall incorporate into the agency's 19
regular audit cycle a reconciliation of the number of tires sold and 20
the amount of revenue collected by the businesses selling new 21
replacement vehicle tires at retail. The department of revenue shall 22
collect on the business excise tax return from the businesses selling 23
new replacement vehicle tires at retail: 24
(a) The number of tires sold; and 25
(b) The fee levied in this section. 26
(3) All other applicable provisions of chapter 82.32 RCW have 27
full force and application with respect to the fee imposed under this 28
section. The department of revenue shall administer this section.29
(4) For the purposes of this section, "new replacement vehicle 30
tires" means tires that are newly manufactured for vehicle purposes 31
and does not include retreaded vehicle tires. 32
PART V: EFFECTIVE DATES AND OTHER MISCELLANEOUS PROVISIONS33
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NEW SECTION. Sec. 501. Section 401 of this act is necessary for 1
the immediate preservation of the public peace, health, or safety, or 2
support of the state government and its existing public institutions, 3
and takes effect immediately.4
NEW SECTION. Sec. 502. Sections 203, 204, 301, and 302 of this 5
act are necessary for the immediate preservation of the public peace, 6
health, or safety, or support of the state government and its 7
existing public institutions, and take effect April 1, 2026.8
NEW SECTION. Sec. 503. Sections 101, 102, 201, and 202 of this 9
act take effect July 1, 2026.10
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