Sales and use tax rate

AN ACT Relating to reducing the state sales and use tax rate to 1
make progress toward a more fair and balanced tax code for Washington 2
state; amending RCW 82.08.020; creating a new section; and providing 3
an effective date. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. (1) Many Washingtonians do not earn enough 6
annually to keep pace with increasing costs of housing, health care, 7
child care, and other essential expenses. Amidst rising cost-of-8
living across the state, the regressive nature of Washington's tax 9
code puts an additional strain on households already struggling to 10
meet their basic needs.11
(2) The legislature finds that Washington state is heavily 12
reliant on excise taxes, including sales and use taxes, and more 13
progress is needed for the state to have a fair and balanced tax 14
system. Washington's tax system remains the second most regressive in 15
the nation as it requires those with the least to pay the most as a 16
percentage of their income. Low-income Washingtonians pay at least 17
three times more in state and local taxes as a percentage of their 18
income than the state's highest-income households. By lowering the 19
sales tax, this reduction in tax responsibility will help reduce one 20
of the key drivers of regressivity in our tax code, taking a 21
S-2344.3
SENATE BILL 5795
State of Washington 69th Legislature 2025 Regular Session
By Senators Krishnadasan, Cortes, Alvarado, Bateman, Dhingra, Frame,
Hasegawa, Lovelett, Nobles, Orwall, Pedersen, Ramos, Riccelli,
Shewmake, Slatter, Stanford, Trudeau, Valdez, Wellman, and C. Wilson
Read first time 03/21/25. Referred to Committee on Ways & Means.
p. 1 SB 5795
significant step toward reducing the disproportionate impact on low 1
and middle-income households, and promoting economic stability and 2
well-being for all Washingtonians. 3
Sec. 2. RCW 82.08.020 and 2022 c 16 s 145 are each amended to 4
read as follows: 5
(1) There is levied and collected a tax equal to six ((and five-6
tenths)) percent of the selling price on each retail sale in this 7
state of: 8
(a) Tangible personal property, unless the sale is specifically 9
excluded from the RCW 82.04.050 definition of retail sale;10
(b) Digital goods, digital codes, and digital automated services, 11
if the sale is included within the RCW 82.04.050 definition of retail 12
sale; 13
(c) Services, other than digital automated services, included 14
within the RCW 82.04.050 definition of retail sale;15
(d) Extended warranties to consumers; and 16
(e) Anything else, the sale of which is included within the RCW 17
82.04.050 definition of retail sale. 18
(2) There is levied and collected an additional tax on each 19
retail car rental, regardless of whether the vehicle is licensed in 20
this state, equal to five and nine-tenths percent of the selling 21
price. The revenue collected under this subsection must be deposited 22
in the multimodal transportation account created in RCW 47.66.070.23
(3) Beginning July 1, 2003, there is levied and collected an 24
additional tax of three-tenths of one percent of the selling price on 25
each retail sale of a motor vehicle in this state, other than retail 26
car rentals taxed under subsection (2) of this section. The revenue 27
collected under this subsection must be deposited in the multimodal 28
transportation account created in RCW 47.66.070. 29
(4) For purposes of subsection (3) of this section, "motor 30
vehicle" has the meaning provided in RCW 46.04.320, but does not 31
include: 32
(a) 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 cannabis; 35
(b) Off-road vehicles as defined in RCW 46.04.365;36
(c) Nonhighway vehicles as defined in RCW 46.09.310; and37
(d) Snowmobiles as defined in RCW 46.04.546. 38
p. 2 SB 5795
(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
NEW SECTION. Sec. 3. This act takes effect January 1, 2027.11
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p. 3 SB 5795