SENATE BILL REPORT

SB 5924

BYSenator Nelson

Limitation of local sales tax revenues imposed by transit districts for purposes of vehicle excise tax distribution.

Senate Committee on Transportation

Senate Hearing Date(s):February 27, 1989

Senate Staff:Gene Baxstrom (786-7303)

AS OF MARCH 7, 1989

BACKGROUND:

Transit operating agencies which include metropolitan municipal corporations, public transportation benefit areas, county transportation authorities, cities and counties in the unincorporated areas are authorized to impose a motor vehicle excise tax within their local jurisdictions.  The amount of the local excise tax is credited against the state excise tax rate.  The transit rate is a maximum of 1 percent for all systems except for those in King, Snohomish, Pierce and Thurston Counties where the rate is .96 percent.

To qualify for imposition of the excise tax, transit authorities must match those amounts with locally generated tax revenues which are earmarked and budgeted for transit purposes.

All transit agencies are authorized an up to six-tenths of 1 percent local sales tax rate for transit purposes.  Only metropolitan municipal corporations, public transportation benefit areas and county transportation authorities may count revenues from this tax as local match for imposition of the local option motor vehicle excise tax.  King County METRO is the only system currently at the six-tenths of 1 percent sales tax rate with most other transit systems in this state at three-tenths of 1 percent.  For most systems, three-tenths of 1 percent of sales tax approximately equals the revenues generated by the maximum allowable motor vehicle excise tax rates for transit agencies. 

SUMMARY:

Only that amount of revenue generated by a sales tax rate of up to three-tenths of 1 percent may be used by transit agencies as local match for the purposes of imposing and collecting the motor vehicle excise tax.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested February 23, 1989