Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Technology, Energy & Communications Committee |
HB 2180
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Brief Description: Concerning sales and use tax exemptions for certain plug-in hybrid electric vehicles.
Sponsors: Representatives Eddy, McCoy, Carlyle, Upthegrove and Chase; by request of Governor Gregoire.
Brief Summary of Bill |
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Hearing Date: 2/18/09
Staff: Kara Durbin (786-7133)
Background:
Types of Electric Vehicles.
Electricity can be used as a transportation fuel to power electric vehicles. Electric vehicles are propelled by an electric motor powered by rechargeable battery packs. These vehicles typically have limited energy storage capacity, which must be replenished by plugging the vehicle into an electrical source to recharge the battery.
Hybrid electric vehicles typically combine the internal combustion engine of a conventional vehicle with the battery and electric motor of an electric vehicle.
A plug-in hybrid electric vehicle is a hybrid electric vehicle with a battery that can be recharged by connecting a plug to an electric power source. It shares the characteristics of both a traditional hybrid electric vehicle, which has an electric motor and an internal combustion engine, and a battery electric vehicle, which uses a plug to connect to the electric grid and can be powered by the stored electricity alone.
Retail Sales and Use Tax.
Retail sales and use taxes are imposed by the state, most cities, and all counties. Retails sales taxes are imposed on retail sales of most articles of tangible personal property and some services. Use taxes apply to the value of most tangible personal property and some services when used in this state, if retail sales taxes were not collected when the property or service was acquired by the user. Use tax rates are the same as retail sales tax rates. The state tax rate is 6.5 percent. The average local tax rate is 2 percent, for an average combined state and local tax rate of 8.5 percent.
All items or services sold or acquired at retail are subject to the retail sales and use taxes unless specifically exempted otherwise. Tax is due at the time of sale or first use within the state.
Sales and Use Tax Exemptions for Alternative Fuel Vehicles.
In 2005 two-year tax exemptions were created for new motor vehicles that use certain alternative fuels or hybrid technology, beginning January 1, 2009. The sale or use of a new passenger car, light duty truck, or medium duty passenger vehicle is exempt from sales and use tax if:
1. the vehicle is exclusively powered by natural gas, propane, hydrogen, or electricity, and the vehicle meets California motor vehicle emissions standards effective January 1, 2005, as adopted by the Department of Energy; or
2. the vehicle uses hybrid technology and has a United States Environmental Protection Agency estimated highway gasoline mileage rating of at least forty miles per gallon.
Summary of Bill:
A sales and use tax exemption is created for new qualified plug-in hybrid electric vehicles. This exemption expires January 1, 2014.
A "qualified plug-in hybrid electric vehicle" is defined as passenger cars, light duty trucks, and medium duty passenger vehicles that: (1) draw propulsion power from a rechargeable battery and directly or indirectly from an internal combustion engine; and (2) use an off-board source of energy to recharge the battery.
Appropriation: None.
Fiscal Note: Requested on February 13, 2009.
Effective Date: The bill contains an emergency clause and takes effect on July 1, 2009.