AN ACT Relating to establishing a tax on certain business activities related to surpluses generated under the zero-emission vehicle program;
HB 2077 establishes a new excise tax on certain transactions involving surplus zero-emission vehicle (ZEV) credits in Washington. The bill applies to manufacturers that bank or sell ZEV credits under the state’s zero-emission vehicle program, with the tax generally set at 2% of the reported sales price for credits sold to another manufacturer and 2% of the average credit price for banked credits carried forward for future compliance. The measure also requires manufacturers to report detailed information about credit transactions, including dates, counterparties, volumes, and prices, while treating individual transaction pricing information as confidential commercial information.
The bill directs the Department of Revenue and the Department of Ecology to share and use this information to calculate average credit prices, determine tax liability, and administer the new tax. Revenue from the tax is dedicated first to the electric vehicle incentive account, then to the state general fund for a limited period, and later to the carbon emissions reduction account. The act includes an emergency clause and applies to ZEV credits banked or sold after the effective date.
HB 2077 amends Washington tax law by creating a new chapter in Title 82 RCW imposing an excise tax on surplus ZEV credit banking and sales, and it adds related reporting, confidentiality, and administrative provisions. It also modifies public disclosure rules to protect certain financial, commercial, and proprietary information, including ZEV credit transaction data, from public release. The bill affects vehicle manufacturers participating in Washington’s zero-emission vehicle program, as well as the Department of Revenue and Department of Ecology, which must collect, calculate, and administer the tax and related reporting.
The bill appears to have received mixed but ultimately sufficient support. It passed the House Finance Committee, the House floor, the Senate Ways & Means Committee, and the Senate floor, but the floor votes were relatively close, indicating meaningful opposition. The overall sentiment in the legislative record suggests support from lawmakers who viewed the measure as a way to capture windfall profits from surplus credit trading and redirect funds toward clean transportation and climate-related programs, alongside concern from opponents about the new tax and its effect on the credit market.
The main point of contention is the policy choice to tax surplus ZEV credits, especially banked credits, which supporters framed as a way to prevent windfall gains and reinvest in cleaner vehicle incentives. Opponents likely objected to the added cost and administrative burden on manufacturers, and to the bill’s treatment of banked credits as sold for tax purposes even when held for future compliance. Another notable issue is the bill’s confidentiality provisions, which shield transaction-level pricing and related proprietary information from disclosure, reflecting concern about market sensitivity and competitive harm.