Washington Senate Bill SB5811

Washington 2025-2026 Regular Session

• Introduced: 4/16/25
• Refer: 4/16/25

Caption

AN ACT Relating to establishing a tax on certain business activities related to surpluses generated under the zero-emission vehicle program;

Summary

SB 5811 creates a new excise tax on certain business activities involving surplus zero-emission vehicle (ZEV) credits generated under Washington’s ZEV program. The bill defines and regulates ZEV credits, including credits that are banked, pooled, or sold, and requires manufacturers to report detailed information to the Department of Revenue and the Department of Ecology about credit transfers, credit banking, and credit sales prices. It also directs Ecology to transmit annual information about manufacturers’ ZEV program activity, including surplus credits, transfers to other states, and credit transactions, so the Department of Revenue can calculate tax liability. The bill imposes a 2% tax on the sale of ZEV credits to another manufacturer, a tax on banked credits based on the average credit price, and a tax on pooled credits, with a possible reduced rate for pooled credits if a manufacturer meets specified Washington sales performance relative to other states. Revenue from the tax is split among the electric vehicle incentive account, the state general fund for a limited period, and the carbon emissions reduction account. The bill also exempts certain manufacturers from the tax if they do not exceed specified thresholds, and it makes credit-price information confidential and exempt from public disclosure.

Impact

The bill would add a new chapter to Title 82 RCW governing taxation of ZEV credit transactions and would amend Washington’s public records exemptions to protect detailed financial and proprietary information reported under the new tax regime. It would require new reporting and administrative coordination between the Department of Ecology and the Department of Revenue, establish tax collection and penalty procedures, and direct how tax proceeds are distributed. The bill applies prospectively to ZEV credits banked, sold, or pooled after the effective date.

Sentiment

The bill text reflects a strong policy rationale in favor of the measure: it frames the tax as a way to capture windfall profits from surplus ZEV credits and reinvest those funds in clean-vehicle incentives and climate-related programs. Because there are no committee transcripts or recorded votes provided, there is no documented legislative debate or formal vote history to indicate broader support or opposition. Based on the bill’s structure, the overall sentiment appears pro-climate and pro-revenue, with an emphasis on fairness and reinvestment rather than discouraging ZEV adoption.

Contention

The main policy tension is between taxing surplus credit revenues and preserving the incentive structure that helps manufacturers comply with Washington’s ZEV requirements. The bill specifically targets what it describes as windfall profits from banked, pooled, and sold credits, while also creating exemptions and a reduced rate for some pooled-credit activity if manufacturers maintain strong Washington ZEV sales. Another likely point of contention is confidentiality: the bill shields credit-price and transaction information from public disclosure, which may be supported by manufacturers as protection for proprietary data but could raise transparency concerns for others. The absence of hearing records means no specific stakeholder positions are documented in the provided materials.