Motor vehicles sales tax use

AN ACT Relating to dedicating the sales tax on motor vehicles to 1
highway uses; amending RCW 82.08.020, 82.12.020, and 46.68.090; 2
providing an effective date; and declaring an emergency.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 82.08.020 and 2022 c 16 s 145 are each amended to 5
read as follows: 6
(1) There is levied and collected a tax equal to six and five-7
tenths percent of the selling price on each retail sale in this state 8
of: 9
(a) Tangible personal property, unless the sale is specifically 10
excluded from the RCW 82.04.050 definition of retail sale;11
(b) Digital goods, digital codes, and digital automated services, 12
if the sale is included within the RCW 82.04.050 definition of retail 13
sale; 14
(c) Services, other than digital automated services, included 15
within the RCW 82.04.050 definition of retail sale;16
(d) Extended warranties to consumers; and 17
(e) Anything else, the sale of which is included within the RCW 18
82.04.050 definition of retail sale. 19
(2) There is levied and collected an additional tax on each 20
retail car rental, regardless of whether the vehicle is licensed in 21
S-0237.1
SENATE BILL 5073
State of Washington 69th Legislature 2025 Regular Session
By Senators Fortunato, Christian, McCune, Wagoner, and J. Wilson
Prefiled 12/17/24. Read first time 01/13/25. Referred to Committee
on Ways & Means.
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this state, equal to five and nine-tenths percent of the selling 1
price. The revenue collected under this subsection must be deposited 2
in the multimodal transportation account created in RCW 47.66.070.3
(3)(a) Beginning July 1, 2003, there is levied and collected an 4
additional tax of three-tenths of one percent of the selling price on 5
each retail sale of a motor vehicle in this state, other than retail 6
car rentals taxed under subsection (2) of this section. The revenue 7
collected under this subsection must be deposited in the multimodal 8
transportation account created in RCW 47.66.070. 9
(((4))) (b) For purposes of this subsection (((3) of this 10
section)), "motor vehicle" has the meaning provided in RCW 46.04.320, 11
but does not include: 12
(((a))) (i) Farm tractors or farm vehicles as defined in RCW 13
46.04.180 and 46.04.181, unless the farm tractor or farm vehicle is 14
for use in the production of ((cannabis)) marijuana;15
(((b))) (ii) Off-road vehicles as defined in RCW 46.04.365;16
(((c))) (iii) Nonhighway vehicles as defined in RCW 46.09.310; 17
and 18
(((d))) (iv) Snowmobiles as defined in RCW 46.04.546.19
(4)(a) Beginning July 1, 2025, all revenue collected under 20
subsection (1) of this section on each new and used retail sale of a 21
vehicle in this state, including private-party sales, but excluding 22
retail car rentals taxed under subsection (2) of this section, must 23
be deposited in the motor vehicle fund. All revenue collected under 24
this subsection may only be used for highway purposes as defined in 25
RCW 46.68.130. For the purposes of this subsection, "highway 26
purposes" also includes preservation.27
(b) For purposes of this subsection, "vehicle" has the meaning 28
provided in RCW 46.04.670 including, but not limited to, passenger 29
vehicles, light trucks, commercial vehicles, travel trailers, 30
recreational vehicles, intermittent use trailers, motorcycles, and 31
campers, but "vehicle" does not include:32
(i) Farm tractors or farm vehicles as defined in RCW 46.04.180 33
and 46.04.181, unless the farm tractor or farm vehicle is for use in 34
the production of marijuana;35
(ii) Off-road vehicles as defined in RCW 46.04.365;36
(iii) Nonhighway vehicles as defined in RCW 46.09.310;37
(iv) Bicycles as defined in RCW 46.04.071; and38
(v) Snowmobiles as defined in RCW 46.04.546.39
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(5) Beginning on December 8, 2005, 0.16 percent of the taxes 1
collected under subsection (1) of this section must be dedicated to 2
funding comprehensive performance audits required under RCW 3
43.09.470. The revenue identified in this subsection must be 4
deposited in the performance audits of government account created in 5
RCW 43.09.475. 6
(6) The taxes imposed under this chapter apply to successive 7
retail sales of the same property. 8
(7) The rates provided in this section apply to taxes imposed 9
under chapter 82.12 RCW as provided in RCW 82.12.020.10
Sec. 2. RCW 82.12.020 and 2017 c 323 s 520 are each amended to 11
read as follows: 12
(1) There is levied and collected from every person in this state 13
a tax or excise for the privilege of using within this state as a 14
consumer any: 15
(a) Article of tangible personal property acquired by the user in 16
any manner, including tangible personal property acquired at a casual 17
or isolated sale, and including by-products used by the manufacturer 18
thereof, except as otherwise provided in this chapter, irrespective 19
of whether the article or similar articles are manufactured or are 20
available for purchase within this state; 21
(b) Prewritten computer software, regardless of the method of 22
delivery, but excluding prewritten computer software that is either 23
provided free of charge or is provided for temporary use in viewing 24
information, or both; 25
(c) Services defined as a retail sale in RCW 82.04.050 (2) (a) or 26
(g) or (6)(c), excluding services defined as a retail sale in RCW 27
82.04.050(6)(c) that are provided free of charge; 28
(d) Extended warranty; or 29
(e)(i) Digital good, digital code, or digital automated service, 30
including the use of any services provided by a seller exclusively in 31
connection with digital goods, digital codes, or digital automated 32
services, whether or not a separate charge is made for such services.33
(ii) With respect to the use of digital goods, digital automated 34
services, and digital codes acquired by purchase, the tax imposed in 35
this subsection (1)(e) applies in respect to: 36
(A) Sales in which the seller has granted the purchaser the right 37
of permanent use; 38
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(B) Sales in which the seller has granted the purchaser a right 1
of use that is less than permanent; 2
(C) Sales in which the purchaser is not obligated to make 3
continued payment as a condition of the sale; and 4
(D) Sales in which the purchaser is obligated to make continued 5
payment as a condition of the sale. 6
(iii) With respect to digital goods, digital automated services, 7
and digital codes acquired other than by purchase, the tax imposed in 8
this subsection (1)(e) applies regardless of whether or not the 9
consumer has a right of permanent use or is obligated to make 10
continued payment as a condition of use. 11
(2) The provisions of this chapter do not apply in respect to the 12
use of any article of tangible personal property, extended warranty, 13
digital good, digital code, digital automated service, or service 14
taxable under RCW 82.04.050 (2) (a) or (g) or (6)(c), if the sale to, 15
or the use by, the present user or the present user's bailor or donor 16
has already been subjected to the tax under chapter 82.08 RCW or this 17
chapter and the tax has been paid by the present user or by the 18
present user's bailor or donor. 19
(3)(a) Except as provided in this section, payment of the tax 20
imposed by this chapter or chapter 82.08 RCW by one purchaser or user 21
of tangible personal property, extended warranty, digital good, 22
digital code, digital automated service, or other service does not 23
have the effect of exempting any other purchaser or user of the same 24
property, extended warranty, digital good, digital code, digital 25
automated service, or other service from the taxes imposed by such 26
chapters. 27
(b) The tax imposed by this chapter does not apply:28
(i) If the sale to, or the use by, the present user or his or her 29
bailor or donor has already been subjected to the tax under chapter 30
82.08 RCW or this chapter and the tax has been paid by the present 31
user or by his or her bailor or donor; 32
(ii) In respect to the use of any article of tangible personal 33
property acquired by bailment and the tax has once been paid based on 34
reasonable rental as determined by RCW 82.12.060 measured by the 35
value of the article at time of first use multiplied by the tax rate 36
imposed by chapter 82.08 RCW or this chapter as of the time of first 37
use; 38
(iii) In respect to the use of any article of tangible personal 39
property acquired by bailment, if the property was acquired by a 40
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previous bailee from the same bailor for use in the same general 1
activity and the original bailment was prior to June 9, 1961; or2
(iv) To the use of digital goods or digital automated services, 3
which were obtained through the use of a digital code, if the sale of 4
the digital code to, or the use of the digital code by, the present 5
user or the present user's bailor or donor has already been subjected 6
to the tax under chapter 82.08 RCW or this chapter and the tax has 7
been paid by the present user or by the present user's bailor or 8
donor. 9
(4)(a) Except as provided in (b) of this subsection (4), the tax 10
is levied and must be collected in an amount equal to the value of 11
the article used, value of the digital good or digital code used, 12
value of the extended warranty used, or value of the service used by 13
the taxpayer, multiplied by the applicable rates in effect for the 14
retail sales tax under RCW 82.08.020. 15
(b) In the case of a seller required to collect use tax from the 16
purchaser, the tax must be collected in an amount equal to the 17
purchase price multiplied by the applicable rate in effect for the 18
retail sales tax under RCW 82.08.020. 19
(5) For purposes of the tax imposed in this section, "person" 20
includes anyone within the definition of "buyer," "purchaser," and 21
"consumer" in RCW 82.08.010. 22
(6)(a) Beginning July 1, 2025, all use tax revenue collected 23
under subsection (1) of this section on the use of each new and used 24
vehicle in this state, but excluding retail car rentals taxed under 25
RCW 82.08.020, must be deposited in the motor vehicle fund. All 26
revenue collected under this subsection may only be used for highway 27
purposes as defined in RCW 46.68.130.28
(b) For purposes of this subsection:29
(i) "Highway purposes" also includes preservation; and30
(ii) "Vehicle" has the meaning provided in RCW 46.04.670 31
including, but not limited to, passenger vehicles, light trucks, 32
commercial vehicles, travel trailers, recreational vehicles, 33
intermittent use trailers, motorcycles, and campers, but "vehicle" 34
does not include:35
(A) Farm tractors or farm vehicles as defined in RCW 46.04.180 36
and 46.04.181, unless the farm tractor or farm vehicle is for use in 37
the production of marijuana;38
(B) Off-road vehicles as defined in RCW 46.04.365;39
(C) Nonhighway vehicles as defined in RCW 46.09.310;40
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(D) Bicycles as defined in RCW 46.04.071; and1
(E) Snowmobiles as defined in RCW 46.04.546.2
Sec. 3. RCW 46.68.090 and 2015 3rd sp.s. c 44 s 105 are each 3
amended to read as follows: 4
(1) All moneys that have accrued or may accrue to the motor 5
vehicle fund from the fuel tax and/or the tax imposed under RCW 6
82.08.020(4) and 82.12.020(6) must be first expended for purposes 7
enumerated in (a) and (b) of this subsection. The remaining net tax 8
amount must be distributed monthly by the state treasurer in 9
accordance with subsections (2) through (8) of this section.10
(a) For payment of refunds of fuel tax that has been paid and is 11
refundable as provided by law; 12
(b) For payment of amounts to be expended pursuant to 13
appropriations for the administrative expenses of the offices of 14
state treasurer, state auditor, and the department of licensing of 15
the state of Washington in the administration of the fuel tax, which 16
sums must be distributed monthly. 17
(2) All of the remaining net tax amount collected under RCW 18
82.38.030(1) must be distributed as set forth in (a) through (j) of 19
this subsection. 20
(a) For distribution to the motor vehicle fund an amount equal to 21
44.387 percent to be expended for highway purposes of the state as 22
defined in RCW 46.68.130; 23
(b)(i) For distribution to the special category C account, hereby 24
created in the motor vehicle fund, an amount equal to 3.2609 percent 25
to be expended for special category C projects. Special category C 26
projects are category C projects that, due to high cost only, will 27
require bond financing to complete construction. 28
(ii) The following criteria, listed in order of priority, must be 29
used in determining which special category C projects have the 30
highest priority: 31
(A) Accident experience; 32
(B) Fatal accident experience; 33
(C) Capacity to move people and goods safely and at reasonable 34
speeds without undue congestion; and 35
(D) Continuity of development of the highway transportation 36
network. 37
(iii) Moneys deposited in the special category C account in the 38
motor vehicle fund may be used for payment of debt service on bonds 39
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the proceeds of which are used to finance special category C projects 1
under this subsection (2)(b); 2
(c) For distribution to the Puget Sound ferry operations account 3
in the motor vehicle fund an amount equal to 2.3283 percent;4
(d) For distribution to the Puget Sound capital construction 5
account in the motor vehicle fund an amount equal to 2.3726 percent;6
(e) For distribution to the transportation improvement account in 7
the motor vehicle fund an amount equal to 7.5597 percent;8
(f) For distribution to the transportation improvement account in 9
the motor vehicle fund an amount equal to 5.6739 percent and expended 10
in accordance with RCW 47.26.086; 11
(g) For distribution to the cities and towns from the motor 12
vehicle fund an amount equal to 10.6961 percent in accordance with 13
RCW 46.68.110; 14
(h) For distribution to the counties from the motor vehicle fund 15
an amount equal to 19.2287 percent: (i) Out of which there must be 16
distributed from time to time, as directed by the department of 17
transportation, those sums as may be necessary to carry out the 18
provisions of RCW 47.56.725; and (ii) less any amounts appropriated 19
to the county road administration board to implement the provisions 20
of RCW 47.56.725(4), with the balance of such county share to be 21
distributed monthly as the same accrues for distribution in 22
accordance with RCW 46.68.120; 23
(i) For distribution to the county arterial preservation account, 24
hereby created in the motor vehicle fund an amount equal to 1.9565 25
percent. These funds must be distributed by the county road 26
administration board to counties in proportions corresponding to the 27
number of paved arterial lane miles in the unincorporated area of 28
each county and must be used for improvements to sustain the 29
structural, safety, and operational integrity of county arterials. 30
The county road administration board must adopt reasonable rules and 31
develop policies to implement this program and to assure that a 32
pavement management system is used; 33
(j) For distribution to the rural arterial trust account in the 34
motor vehicle fund an amount equal to 2.5363 percent and expended in 35
accordance with RCW 36.79.020. 36
(3) The remaining net tax amount collected under RCW 82.38.030(2) 37
must be distributed to the transportation 2003 account (nickel 38
account). 39
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(4) The remaining net tax amount collected under RCW 82.38.030(3) 1
must be distributed as follows: 2
(a) 8.3333 percent must be distributed to the incorporated cities 3
and towns of the state in accordance with RCW 46.68.110;4
(b) 8.3333 percent must be distributed to counties of the state 5
in accordance with RCW 46.68.120; and 6
(c) The remainder must be distributed to the transportation 7
partnership account created in RCW 46.68.290. 8
(5) The remaining net tax amount collected under RCW 82.38.030(4) 9
must be distributed as follows: 10
(a) 8.3333 percent must be distributed to the incorporated cities 11
and towns of the state in accordance with RCW 46.68.110;12
(b) 8.3333 percent must be distributed to counties of the state 13
in accordance with RCW 46.68.120; and 14
(c) The remainder must be distributed to the transportation 15
partnership account created in RCW 46.68.290. 16
(6) The remaining net tax amount collected under RCW 82.38.030 17
(5) and (6) must be distributed to the transportation partnership 18
account created in RCW 46.68.290. 19
(7) The remaining net tax amount collected under RCW 82.38.030 20
(7) and (8) must be distributed to the connecting Washington account 21
created in RCW 46.68.395. 22
(8) Nothing in this section or in RCW 46.68.130 may be construed 23
so as to violate any terms or conditions contained in any highway 24
construction bond issues now or hereafter authorized by statute and 25
whose payment is by such statute pledged to be paid from any excise 26
taxes on fuel. 27
NEW SECTION. Sec. 4. This act is necessary for the immediate 28
preservation of the public peace, health, or safety, or support of 29
the state government and its existing public institutions, and takes 30
effect July 1, 2025.31
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