S-0236.2
SENATE BILL 5026
State of Washington 69th Legislature 2025 Regular Session
By Senator King
Prefiled 12/10/24.
1 AN ACT Relating to dedicating the state sales tax on motor
2 vehicles for transportation; amending RCW 82.08.020 and 82.12.020;
3 reenacting and amending RCW 43.84.092 and 43.84.092; adding a new
4 section to chapter 46.68 RCW; providing effective dates; and
5 providing an expiration date.
6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
7 Sec. 1. RCW 82.08.020 and 2022 c 16 s 145 are each amended to
8 read as follows:
9 (1) There is levied and collected a tax equal to six and five-
10 tenths percent of the selling price on each retail sale in this state
11 of:
12 (a) Tangible personal property, unless the sale is specifically
13 excluded from the RCW 82.04.050 definition of retail sale;
14 (b) Digital goods, digital codes, and digital automated services,
15 if the sale is included within the RCW 82.04.050 definition of retail
16 sale;
17 (c) Services, other than digital automated services, included
18 within the RCW 82.04.050 definition of retail sale;
19 (d) Extended warranties to consumers; and
20 (e) Anything else, the sale of which is included within the RCW
21 82.04.050 definition of retail sale.
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 1 (2) There is levied and collected an additional tax on each
2 retail car rental, regardless of whether the vehicle is licensed in
3 this state, equal to five and nine-tenths percent of the selling
4 price. The revenue collected under this subsection must be deposited
5 in the multimodal transportation account created in RCW 47.66.070.
6 (3)(a) Beginning July 1, 2003, there is levied and collected an
7 additional tax of three-tenths of one percent of the selling price on
8 each retail sale of a motor vehicle in this state, other than retail
9 car rentals taxed under subsection (2) of this section. The revenue
10 collected under this subsection must be deposited in the multimodal
11 transportation account created in RCW 47.66.070.
12 (((4))) (b) For purposes of this subsection (((3) of this
13 section)), "motor vehicle" has the meaning provided in RCW 46.04.320,
14 but does not include:
15 (((a))) (i) Farm tractors or farm vehicles as defined in RCW
16 46.04.180 and 46.04.181, unless the farm tractor or farm vehicle is
17 for use in the production of ((cannabis)) marijuana;
18 (((b))) (ii) Off-road vehicles as defined in RCW 46.04.365;
19 (((c))) (iii) Nonhighway vehicles as defined in RCW 46.09.310;
20 and
21 (((d))) (iv) Snowmobiles as defined in RCW 46.04.546.
22 (4)(a) Beginning July 1, 2026, and every year thereafter, 16.66
23 percent of all revenue collected under subsection (1) of this section
24 on each new and used retail sale of a vehicle in this state,
25 including private-party sales, but excluding retail car rentals taxed
26 under subsection (2) of this section, must be deposited in the
27 transportation preservation and maintenance account.
28 (b) Beginning July 1, 2027, and every year thereafter, an
29 additional 16.66 percent for a total of 33.3 percent of all revenue
30 collected under subsection (1) of this section on each new and used
31 retail sale of a vehicle in this state, including private-party
32 sales, but excluding retail car rentals taxed under subsection (2) of
33 this section, must be deposited in the transportation preservation
34 and maintenance account.
35 (c) Beginning July 1, 2028, and every year thereafter, an
36 additional 16.66 percent for a total of 50 percent of all revenue
37 collected under subsection (1) of this section on each new and used
38 retail sale of a vehicle in this state, including private-party
39 sales, but excluding retail car rentals taxed under subsection (2) of
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 1 this section, must be deposited in the transportation preservation
2 and maintenance account.
3 (d) Beginning July 1, 2029, and every year thereafter, an
4 additional 16.66 percent for a total of 66.6 percent of all revenue
5 collected under subsection (1) of this section on each new and used
6 retail sale of a vehicle in this state, including private-party
7 sales, but excluding retail car rentals taxed under subsection (2) of
8 this section, must be deposited in the transportation preservation
9 and maintenance account.
10 (e) Beginning July 1, 2030, and every year thereafter, an
11 additional 16.66 percent for a total of 83.3 percent of all revenue
12 collected under subsection (1) of this section on each new and used
13 retail sale of a vehicle in this state, including private-party
14 sales, but excluding retail car rentals taxed under subsection (2) of
15 this section, must be deposited in the transportation preservation
16 and maintenance account.
17 (f) Beginning July 1, 2031, and every year thereafter, all
18 revenue collected under subsection (1) of this section on each new
19 and used retail sale of a vehicle in this state, including private-
20 party sales, but excluding retail car rentals taxed under subsection
21 (2) of this section, must be deposited in the transportation
22 preservation and maintenance account.
23 (g) For purposes of this subsection, "vehicle" has the meaning
24 provided in RCW 46.04.670 including, but not limited to, passenger
25 vehicles, light trucks, commercial vehicles, travel trailers,
26 recreational vehicles, intermittent use trailers, motorcycles, and
27 campers, but "vehicle" does not include:
28 (i) Farm tractors or farm vehicles as defined in RCW 46.04.180
29 and 46.04.181, unless the farm tractor or farm vehicle is for use in
30 the production of marijuana;
31 (ii) Off-road vehicles as defined in RCW 46.04.365;
32 (iii) Nonhighway vehicles as defined in RCW 46.09.310;
33 (iv) Bicycles as defined in RCW 46.04.071; and
34 (v) Snowmobiles as defined in RCW 46.04.546.
35 (5) Beginning on December 8, 2005, 0.16 percent of the taxes
36 collected under subsection (1) of this section must be dedicated to
37 funding comprehensive performance audits required under RCW
38 43.09.470. The revenue identified in this subsection must be
39 deposited in the performance audits of government account created in
40 RCW 43.09.475.
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1 (6) The taxes imposed under this chapter apply to successive
2 retail sales of the same property.
3 (7) The rates provided in this section apply to taxes imposed
4 under chapter 82.12 RCW as provided in RCW 82.12.020.
5 Sec. 2. RCW 82.12.020 and 2017 c 323 s 520 are each amended to
6 read as follows:
7 (1) There is levied and collected from every person in this state
8 a tax or excise for the privilege of using within this state as a
9 consumer any:
10 (a) Article of tangible personal property acquired by the user in
11 any manner, including tangible personal property acquired at a casual
12 or isolated sale, and including by-products used by the manufacturer
13 thereof, except as otherwise provided in this chapter, irrespective
14 of whether the article or similar articles are manufactured or are
15 available for purchase within this state;
16 (b) Prewritten computer software, regardless of the method of
17 delivery, but excluding prewritten computer software that is either
18 provided free of charge or is provided for temporary use in viewing
19 information, or both;
20 (c) Services defined as a retail sale in RCW 82.04.050 (2) (a) or
21 (g) or (6)(c), excluding services defined as a retail sale in RCW
22 82.04.050(6)(c) that are provided free of charge;
23 (d) Extended warranty; or
24 (e)(i) Digital good, digital code, or digital automated service,
25 including the use of any services provided by a seller exclusively in
26 connection with digital goods, digital codes, or digital automated
27 services, whether or not a separate charge is made for such services.
28 (ii) With respect to the use of digital goods, digital automated
29 services, and digital codes acquired by purchase, the tax imposed in
30 this subsection (1)(e) applies in respect to:
31 (A) Sales in which the seller has granted the purchaser the right
32 of permanent use;
33 (B) Sales in which the seller has granted the purchaser a right
34 of use that is less than permanent;
35 (C) Sales in which the purchaser is not obligated to make
36 continued payment as a condition of the sale; and
37 (D) Sales in which the purchaser is obligated to make continued
38 payment as a condition of the sale.
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 1 (iii) With respect to digital goods, digital automated services,
2 and digital codes acquired other than by purchase, the tax imposed in
3 this subsection (1)(e) applies regardless of whether or not the
4 consumer has a right of permanent use or is obligated to make
5 continued payment as a condition of use.
6 (2) The provisions of this chapter do not apply in respect to the
7 use of any article of tangible personal property, extended warranty,
8 digital good, digital code, digital automated service, or service
9 taxable under RCW 82.04.050 (2) (a) or (g) or (6)(c), if the sale to,
10 or the use by, the present user or the present user's bailor or donor
11 has already been subjected to the tax under chapter 82.08 RCW or this
12 chapter and the tax has been paid by the present user or by the
13 present user's bailor or donor.
14 (3)(a) Except as provided in this section, payment of the tax
15 imposed by this chapter or chapter 82.08 RCW by one purchaser or user
16 of tangible personal property, extended warranty, digital good,
17 digital code, digital automated service, or other service does not
18 have the effect of exempting any other purchaser or user of the same
19 property, extended warranty, digital good, digital code, digital
20 automated service, or other service from the taxes imposed by such
21 chapters.
22 (b) The tax imposed by this chapter does not apply:
23 (i) If the sale to, or the use by, the present user or his or her
24 bailor or donor has already been subjected to the tax under chapter
25 82.08 RCW or this chapter and the tax has been paid by the present
26 user or by his or her bailor or donor;
27 (ii) In respect to the use of any article of tangible personal
28 property acquired by bailment and the tax has once been paid based on
29 reasonable rental as determined by RCW 82.12.060 measured by the
30 value of the article at time of first use multiplied by the tax rate
31 imposed by chapter 82.08 RCW or this chapter as of the time of first
32 use;
33 (iii) In respect to the use of any article of tangible personal
34 property acquired by bailment, if the property was acquired by a
35 previous bailee from the same bailor for use in the same general
36 activity and the original bailment was prior to June 9, 1961; or
37 (iv) To the use of digital goods or digital automated services,
38 which were obtained through the use of a digital code, if the sale of
39 the digital code to, or the use of the digital code by, the present
40 user or the present user's bailor or donor has already been subjected
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 1 to the tax under chapter 82.08 RCW or this chapter and the tax has
2 been paid by the present user or by the present user's bailor or
3 donor.
4 (4)(a) Except as provided in (b) of this subsection (4), the tax
5 is levied and must be collected in an amount equal to the value of
6 the article used, value of the digital good or digital code used,
7 value of the extended warranty used, or value of the service used by
8 the taxpayer, multiplied by the applicable rates in effect for the
9 retail sales tax under RCW 82.08.020.
10 (b) In the case of a seller required to collect use tax from the
11 purchaser, the tax must be collected in an amount equal to the
12 purchase price multiplied by the applicable rate in effect for the
13 retail sales tax under RCW 82.08.020.
14 (5) For purposes of the tax imposed in this section, "person"
15 includes anyone within the definition of "buyer," "purchaser," and
16 "consumer" in RCW 82.08.010.
17 (6)(a) Beginning July 1, 2026, and every year thereafter, 16.66
18 percent of all revenue collected under subsection (1) of this section
19 on the use of each new and used vehicle in this state, but excluding
20 retail car rentals taxed under RCW 82.08.020, must be deposited in
21 the transportation preservation and maintenance account.
22 (b) Beginning July 1, 2027, and every year thereafter, an
23 additional 16.66 percent for a total of 33.3 percent of all revenue
24 collected under subsection (1) of this section on the use of each new
25 and used vehicle in this state, but excluding retail car rentals
26 taxed under RCW 82.08.020, must be deposited in the transportation
27 preservation and maintenance account.
28 (c) Beginning July 1, 2028, and every year thereafter, an
29 additional 16.66 percent for a total of 50 percent of all revenue
30 collected under subsection (1) of this section on the use of each new
31 and used vehicle in this state, but excluding retail car rentals
32 taxed under RCW 82.08.020, must be deposited in the transportation
33 preservation and maintenance account.
34 (d) Beginning July 1, 2029, and every year thereafter, an
35 additional 16.66 percent for a total of 66.6 percent of all revenue
36 collected under subsection (1) of this section on the use of each new
37 and used vehicle in this state, but excluding retail car rentals
38 taxed under RCW 82.08.020, must be deposited in the transportation
39 preservation and maintenance account.
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 1 (e) Beginning July 1, 2030, and every year thereafter, an
2 additional 16.66 percent for a total of 83.3 percent of all revenue
3 collected under subsection (1) of this section on the use of each new
4 and used vehicle in this state, but excluding retail car rentals
5 taxed under RCW 82.08.020, must be deposited in the transportation
6 preservation and maintenance account.
7 (f) Beginning July 1, 2031, and every year thereafter, all
8 revenue collected under subsection (1) of this section on the use of
9 each new and used vehicle in this state, but excluding retail car
10 rentals taxed under RCW 82.08.020, must be deposited in the
11 transportation preservation and maintenance account.
12 (g) For purposes of this subsection, "vehicle" has the meaning
13 provided in RCW 46.04.670 including, but not limited to, passenger
14 vehicles, light trucks, commercial vehicles, travel trailers,
15 recreational vehicles, intermittent use trailers, motorcycles, and
16 campers, but "vehicle" does not include:
17 (i) Farm tractors or farm vehicles as defined in RCW 46.04.180
18 and 46.04.181, unless the farm tractor or farm vehicle is for use in
19 the production of marijuana;
20 (ii) Off-road vehicles as defined in RCW 46.04.365;
21 (iii) Nonhighway vehicles as defined in RCW 46.09.310;
22 (iv) Bicycles as defined in RCW 46.04.071; and
23 (v) Snowmobiles as defined in RCW 46.04.546.
24 NEW SECTION. Sec. 3. A new section is added to chapter 46.68
25 RCW to read as follows:
26 The transportation preservation and maintenance account is
27 created in the state treasury. All receipts from the sales and use
28 tax on new and used vehicles must be deposited in the account
29 pursuant to RCW 82.08.020 and 82.12.020. Moneys in the account may be
30 spent only after appropriation. Expenditures from the account may be
31 used only for preservation and maintenance of highways, roads, and
32 bridges.
33 Sec. 4. RCW 43.84.092 and 2024 c 210 s 4 and 2024 c 168 s 12 are
34 each reenacted and amended to read as follows:
35 (1) All earnings of investments of surplus balances in the state
36 treasury shall be deposited to the treasury income account, which
37 account is hereby established in the state treasury.
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 1 (2) The treasury income account shall be utilized to pay or
2 receive funds associated with federal programs as required by the
3 federal cash management improvement act of 1990. The treasury income
4 account is subject in all respects to chapter 43.88 RCW, but no
5 appropriation is required for refunds or allocations of interest
6 earnings required by the cash management improvement act. Refunds of
7 interest to the federal treasury required under the cash management
8 improvement act fall under RCW 43.88.180 and shall not require
9 appropriation. The office of financial management shall determine the
10 amounts due to or from the federal government pursuant to the cash
11 management improvement act. The office of financial management may
12 direct transfers of funds between accounts as deemed necessary to
13 implement the provisions of the cash management improvement act, and
14 this subsection. Refunds or allocations shall occur prior to the
15 distributions of earnings set forth in subsection (4) of this
16 section.
17 (3) Except for the provisions of RCW 43.84.160, the treasury
18 income account may be utilized for the payment of purchased banking
19 services on behalf of treasury funds including, but not limited to,
20 d