Washington state debates extending sales tax break for EVs

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Washington Governor Jay Inslee wants to extend a sales tax break for EVs, explore giving them access to carpool lanes, and create incentives for builders to include high-speed charging in new projects. He outlined his ideas at a clean-energy conference in early November, and is expected to release specific proposals with his budget in December.

EVs and other alternative-fuel vehicles are currently exempt from state sales tax, which ranges from 7 percent to 9.6 percent. It’s not clear how many buyers have taken advantage of the tax break, but the state Department of Revenue estimates that extending the exemption would cost about $13 million in tax revenues in fiscal year 2016.

Both Republican and Democratic lawmakers sponsored bills during the last legislative session to extend the sales tax break, which expires July 1, but others aren’t so sure.

“I’m not enthusiastic about a subsidy that picks winners and losers and doesn’t help the middle class,” said Rep. Reuven Carlyle (D-Seattle).

“There are definitely clean air benefits. It’s a huge win,” said Sen. Mark Mullet (D-Issaquah), who recently helped form a bipartisan electric vehicle legislative caucus. Mullet said he leans toward making buyers pay half of the usual sales tax, and ensuring that the money goes toward building more charging stations. He doesn’t favor giving them HOV access, as those lanes are already crowded.

Some lawmakers have suggested putting a cap on the value of eligible vehicles, as has also been proposed in California. “Tell me that a person that buys a Tesla for $70,000 or $80,000 shouldn’t have to pay sales tax?” said Sen. Curtis King, who co-chairs the Transportation Committee.

Washington has set a goal of having 50,000 “clean vehicles” on the road by 2020. There are currently about 7,000 EVs and 3,000 PHEVs registered in the state. 

 

Source: AP, Green Car Reports
Image: Nicolas Raymond/Flickr