The 18th Amendment and Fuel Taxes. Since 1921, the state of Washington has levied a motor vehicle fuel tax (MVFT). The current MVFT is $0.494 per gallon and is distributed among state highway programs, the state ferry system, and local governments. The state highway programs include revenue packages, such as the 2003 Transportation Nickel package, the 2005 Transportation Partnership, and the Connecting Washington package which the Legislature passed in 2015.
The 18th Amendment to the Washington Constitution requires the state's MVFT, vehicle licensing fees, and all other state revenue intended to be used for highway purposes be deposited into the Motor Vehicle Fund. Moneys in that fund may only be spent for highway purposes, which are defined to include expenditures on construction, preservation, maintenance, operation, and administration of highways and ferries.
Transfers to Non-Highway Accounts. Transfers are made from the Motor Vehicle Fund to the ORV and Non-highway Vehicle Account, the Marine Fuel Tax Refund Account, and the Snowmobile Account for motor vehicle fuel taxes paid by non-highway users. Each of these transfers is currently made based on a calculation based on a fuel tax rate of $0.349 per gallon. After July 1, 2031, the rate for use in calculating the transfers will be based on the motor vehicle fuel tax rate in effect at that time.
Sales and Use Taxes. Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services. If retail sales taxes were not collected when the user acquired the property, digital products, or services, then use tax applies to the value of property, digital product, or service when used in this state. The state, all counties, and all cities levy retail sales and use taxes. The state sales and use tax rate is 6.5 percent. State sales and use tax revenues are deposited into the state general fund.
An additional 0.3 percent sales and use tax on motor vehicle purchases was enacted in 2003. Revenue generated from the 0.3 percent sales and use tax on vehicles is deposited into the Multimodal Transportation Account for transportation purposes.
For-Hire Vehicles and Transportation Network Companies. Certain private transportation providers, such as for hire vehicles and taxicabs, are regulated by state law. Generally, cities, counties, and port districts may license, control, and regulate for-hire vehicles within their respective jurisdictions, including imposing regulatory fees. Current law does not specifically provide for the regulation of what are commonly known as ridesharing companies, which are companies that use a digital network to connect passengers to drivers for providing a prearranged ride, often by use of the driver's personal vehicle. These are sometimes referred to as transportation network companies (TNCs). To the extent that regulatory and other fees are imposed on for-hire vehicles, taxicabs, and TNCs, this is generally done by local governments.
Third-Party Food Delivery. A third-party food delivery service connects customers with restaurants and allows them to place orders and have orders delivered to their homes. The regulation for third-party food delivery services are generally done by local governments through business and licensing laws. Besides regular licensing provisions, third-party food delivery services are not regulated at the state level and the state does not impose fees on these activities.
Plate Fee. The current fee for original and replacement license plates for most vehicles is $10. The current fee for original and replacement motorcycle license plates is $4.
Driver Licenses & Identicards. The Department of Licensing issues driver licenses and identification cards known as identicards. The fee for a 6-year driver license or identicard is $54.
Enhanced Driver Licenses and Indenticards. An enhanced driver license (EDL) or enhanced identicard (EID) may be issued to a Washington resident who is also a United States citizen if they have confirmed their identity and citizenship. A person applying for an EDL must be at least 18 years old and any age for an enhanced ID card.
The fee for a 6-year EDL or EID is $24 in addition to any other fees due for a driver license or ID card. The EDL and EID revenues are deposited into the Highway Safety Fund unless prior to July 1, 2023, a clean fuel standard policy is initiated or adopted, in which case the EDL and EID fees are deposited into the Connecting Washington Account.
Rental Car Tax. Rental cars are subject to an additional 5.9 percent state sales and use tax that is imposed on each rental car contract. Rental cars are also subject to some locally imposed taxes. Proceeds from the state rental car tax are deposited into the Multimodal Transportation Account.
Personal Vehicle Sharing. Personal vehicle sharing is generally described as a transaction in which a privately-owned vehicle owner uses a broker or online platform to connect with customers wishing to rent their vehicle. Current law provides regulations around vehicle safety certifications and auto insurance coverage. Personal vehicle sharing is subject to sales and use tax provisions, but not the rental car tax.
Vehicle Registration and Weight Fee. Motor vehicles used on public highways must generally be registered annually with the Department of Licensing. Most vehicles, such as passenger cars, motorcycles, sports utility vehicles, tow trucks, for-hire vehicles, certain trailers, and taxicabs, are subject to the following:
There are also fees and charges based on where the vehicle is registered geographically and whether the vehicle qualifies for a fee based on vehicle type, such as electric vehicles and motor homes.
The majority of the proceeds from vehicle weight fees are deposited in the Multimodal Transportation Account. Funds in the account are used for transportation purposes, which is broader than highway purposes and can include public transportation and rail.
Beginning July 1, 2022, an additional $10 per year weight fee is added and the increased revenues will be deposited into the Multimodal Transportation Fund, unless prior to July 1, 2023, a clean fuel standard policy is initiated or adopted, in which case the weight fee is deposited into the Connecting Washington Account.
License Fee by Weight for Light Duty Trucks. In lieu of the vehicle license fee and weight fees, trucks, including light duty trucks, are subject to a license fee based on gross vehicle weight. For light duty trucks, which are those trucks under 10,000 pounds, the current annual license fees by weight, range from $53 to $93.
Beginning July 1, 2022, an additional $10 per year fee is added on vehicles with a gross vehicle weight of less than or equal to 12,000, which is distributed to various accounts within the Motor Vehicle Fund, consistent with the distribution of other license fees by weight.
Freight Project Fees. A freight project fee of 15 percent of the license fee by weight applies to vehicles that have a gross vehicle weight of more than 10,000 pounds. Proceeds from the fee are deposited in the Connecting Washington Account.
Driver Abstract Fee. The driver abstract is a summary of an individual's driving record that is often used by employers or prospective employers, data brokers, volunteer organizations, insurance carriers, alcohol and drug assessment or treatment agencies, or other entities. The current fee for a driver abstract is $13.
Stolen Vehicle Check Fee. Vehicles previously registered in another state and registering in the state for the first time, must have a stolen vehicle check, whereby the vehicle is checked against national and state databases for any titling or other issues. The stolen vehicle check fee is $15.
Capital Vessel Surcharge. There are two capital vessel surcharges imposed that total $0.50 on every ferry fare sold with the proceeds being deposited in the Capital Vessel Replacement Account.
Trip Permit Fee. A vehicle trip permit issued by the state allows a vehicle owner to operate an unregistered vehicle on public highways up to three days. The trip permit is usually used for unregistered vehicles, license tabs that have expired, or when a current gross weight license is insufficient for the load being carried. No more than three trip permits may be used for any one vehicle in any consecutive 30-day period, and no more than two trip permits may be used for any one recreational vehicle in a one-year period.
Personal Trailer Fee. Private-use single-axle trailers of 2,000 pounds scale weight or less that are not used for commercial purposes are subject to a $15 annual license fee.
Title Fee and Quick Titles. A $15 title fee is imposed on an initial title application, a change in ownership, a lost title, or for certain other reasons. For an extra fee, a quick title may be issued with a faster turnaround. The current quick title fee is $50.
Driver License Photo Only Fee. Individuals who wish to correct information on a driver license or identicard, such as obtaining an updated photograph, may do so by paying a $10 fee.
Motor Home Vehicle Weight Fee. A motor home is a motor vehicle originally designed, reconstructed, or permanently altered to provide facilities for human habitation. A person applying for a motor home vehicle registration must, in lieu of the motor vehicle weight fee, pay a motor home vehicle weight fee of $75 per year in addition to all other fees and taxes required by law.
Service Fee and License Plate Technology Fees. Most vehicles are subject to a $0.50 license service fee at time registration or renewal. Most vehicles are also subject to a $0.25 license plate technology fee at time registration or renewal. Light, medium, and heavy duty trucks are not subject to the $0.75 in combined fees.
Aircraft Fuel Tax. The current aircraft fuel tax is $0.11 per gallon and is used for the operations of the Washington Department of Transportation's Aviation Division, and grants for preservation of small public-use airports. Exemptions from the fuel tax include:
Vehicle Look-Up Fee. Certain kinds of individuals and entities can do a vehicle look-up which will include certain kinds of information, such as the name and address of an individual vehicle owner and some vehicle information. These records are accessed only with a disclosure and use agreement. The current vehicle look-up fee is $2.
Driver Record Monitoring Fee. Employers, volunteer organizations, insurance carriers, alcohol and drug assessment or treatment agencies, or other entities can monitor an individual's driving record on an on-going basis. These records are accessed only with a disclosure and use agreement. The current driver record monitoring fee is $0.06.
Bulk Data Fee. Research organizations, data brokers, parking enforcement agencies, insurance carriers, or other entities can obtain certain kinds of bulk information for a fee. These records are accessed only with a disclosure and use agreement. The current fee is $0.025 per record or $25 per 1,000 records.
Intermittent-Use Trailer Fee. Owners of trailers with a scale weight of 2,000 pounds or less and only using it on an intermittent basis may do so by paying a $187.50 one-time fee. The intermittent use trailer is essentially a permanent registration that only expires when the trailer changes ownership or is disposed of.
Toll Exemptions. The WSTC has provided a toll exemption for buses, including transit, school buses, and qualifying private buses serving employees or the general public.
Hazardous Substance Tax Distribution. The hazardous substance tax is imposed on the first possession of hazardous substances in the state. The tax is generally imposed on a per-barrel basis and applies to petroleum products, certain pesticides, and certain chemicals.
Until the biennium after the enactment of an additive transportation funding act, $50 million per biennium is transferred from hazardous substance tax collections to the Motor Vehicle Fund. An additive transportation funding act means an act in which the combined total of new revenues deposited into the Motor Vehicle Fund and the Multimodal Transportation Account exceed $2 billion per biennium.
Auto Dealer Documentary Service Fee. Current law allows auto dealers to charge an optional fee up to $150 for the administrative costs associated with titling, registration, tax collection, and other services. To collect this fee, the auto dealers must take a variety of actions including, disclosing to the buyer that the fee is negotiable.
Tacoma Narrows Bridge Finance History. The eastbound Tacoma Narrows Bridge (TNB) opened to traffic in July 2007 as a toll bridge. Toll rates are set by the Transportation Commission, and are currently $5.00 with a Good to Go! Pass, $6.00 with cash, and $7.00 with pay by mail for a standard, 2-axle vehicle. The eastbound TNB cost $786 million to complete, approximately $57.6 million of which was construction sales tax, and was funded by selling general obligation bonds backed by the Motor Vehicle Account and the full faith and credit of the state of Washington. Toll revenue is used to repay the debt service, the sales tax deferred until fiscal year 2032, and any motor vehicle account loans. Tolls may only be collected on the facility until these costs are paid in full. The eastbound TNB was financed with an escalating debt structure, resulting in toll rate increases and occasional loans or transfers to the TNB account as debt payments have increased.
The 2017-19 transportation budget included direction to the Commission to convene a refinance workgroup for the TNB, tasked with reviewing and providing recommendations on various scenarios for future toll payer relief. The workgroup's preferred policy solution was to transfer non-toll state funding into the TNB Account to offset future debt service payment increases, allocated across the remaining years of tolling at levels that would avoid any toll rate increases over current toll rates. Legislation in 2018 authorized a series of intended loans up to a total of $85 million to keep TNB toll rates at no more than $0.25 higher than current rates. The first loan of $12.5 million was provided in the 2019-21 transportation budget.
Fuel Taxes. Beginning July 1, 2021, the state motor vehicle fuel tax is increased from $0.494 to by $0.592 per gallon. Revenue from the $0.098 per gallon increase is deposited in the Forward Washington Account.
The rate used to calculate transfers from the Motor Vehicle Fund to the ORV and Non-highway Vehicle Account, the Marine Fuel Tax Refund Account, and the Snowmobile Account for motor vehicle fuel taxes paid by non-highway users is increased to $0.447 per gallon, which represents a $0.098 per gallon increase.
Shift Car Sales and Use Tax on Electric Vehicles and Hybrids. Beginning July 1, 2025, the revenue from the state 6.5 percent sales and use tax imposed on new and used sales of electric or hybrid vehicles is deposited in the Forward Flexible Account. The vehicles covered in this redirection are passenger cars or light trucks that are:
Statewide Special Transportation Benefit Assessment. Beginning January 1, 2023, an additional assessment is imposed on new construction for developed parcels for the purposes of mitigating the impacts of growth on state transportation infrastructure throughout the state. The benefit assessment is determined by applying any increase in assessed value over the prior year derived from new construction to the applicable rate:
Parcels classified as designated forestland, agriculture land, or timberland are exempt from the special transportation benefit assessment. All revenues collected from the special transportation benefit assessment will be deposited in the Forward Flexible Account.
Sales and Use Tax on Construction to Transportation. For fiscal years 2026 through fiscal year 2037, the state treasurer must make annual transfers of $47 million from the general fund to the Forward Flexible Account. This represents an estimate of the state sales and use tax generated off of the construction projects in the Forward Washington transportation package over sixteen years.
Automobile Parts Sales and Use Tax. Beginning October 1, 2021, an additional 1 percent sales and use tax is imposed on automobile parts and accessories. All revenues collected from the additional 1 percent tax will be deposited in the Forward Flexible Account.
For-Hire Vehicles and Transportation Network Company Fees. Beginning January 1, 2023, a new $0.50 per trip fee on prearranged and non-prearranged rides by for-hire vehicles operating in the state is imposed at the state level. However, in a county with a population greater than 2 million, the per trip fee is $0.25.
The local imposition of per trip fees on prearranged rides by transportation network company drivers is preempted, except that this preemption does not apply to local laws and ordinances enacted regarding per trip fees in place prior to January 1, 2021.
For-hire vehicles for purposes of this fee are defined as vehicles used for the transportation of passengers for compensation including, taxicab transportation services and a TNC driver providing prearranged trips through a digital network. Most other types of transportation providers are specifically exempted from this fee. The Department of Licensing (DOL) is directed to adopt rules for the:
All per trip fee revenue will be deposited in the Forward Flexible Account. Of this amount, 20 percent of the revenues generated from the for-hire vehicle fee will be used to enhance the special needs transportation grant program and the transit coordination grant program.
By August 1, 2021, DOL must convene a work group to negotiate and develop a comprehensive framework and recommendations for the regulation of transportation network companies and coordinated linkages with existing systems for taxi and for-hire services regulated by state and local governments. A final report of an agreed to framework and recommendations, including draft legislation, must be submitted by December 1, 2022.
Third-Party Food Delivery Fee. Beginning January 1, 2022, a new $0.25 cent per trip fee on prearranged food delivery trips operating in the state is established. This fee will be paid by the third-party food delivery service provider based on each order processed. All per trip fee revenue will be deposited in the Forward Flexible Account. The local imposition of per trip fees on prearranged food deliveries is preempted.
The third-party food delivery service fee does not apply to trips by drivers exclusively employed by a grocery store, mini-market, convenience store, or restaurant or other similar business actually preparing the food product or meal. The per trip fee also does not apply to food deliveries to senior citizens made by a nonprofit organization.
Plate Fee. Beginning October 1, 2021, the fee for original and replacement license plates for most vehicles is increased from $10 to $15. Beginning October 1, 2021, the fee for original and replacement motorcycle license plates is increased from $4 to $6. The plate fee increases will be deposited in the Forward Washington Account.
Enhanced Driver Licenses and Indenticards. Beginning October 1, 2021, the enhanced driver license or enhanced ID card fee for a 6-year license is increased from $24 to $42. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Rental Car Tax. Beginning October 1, 2021, the additional rental car tax is increased from 5.9 percent to 6.9 percent. Proceeds from the increase in the state rental car tax will be deposited in the Forward Flexible Account.
Personal Vehicle Sharing Tax. Beginning October 1, 2021, a new personal vehicle sharing tax is imposed at a rate of 5.0 percent of the selling price of the rental. The revenue from the personal vehicle sharing tax will be deposited in the Forward Flexible Account.
Freight Project Fees. Beginning October 1, 2021, the freight project fee of 15 percent is increased to 20 percent. Proceeds from the 5 percent freight project fee will be deposited in the Forward Washington Account.
Driver Licenses & Identicards. Beginning October 1, 2021, the fee for a six-year driver's licenses and identicards is increased from $54 to $60. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Driver Abstract Fee. Beginning October 1, 2021, the driver abstract fee is increased from $13 to $14. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Stolen Vehicle Check Fee. Beginning October 1, 2021, the stolen vehicle check fee is increased from $15 to $25. The revenue from the fee increase will be deposited in the Forward Washington Account.
Vehicle Weight Fees. The additional $10 per year weight fee increase on most vehicles, such as passenger cars, motorcycles, sports utility vehicles, tow trucks, for-hire vehicles, certain trailers, and taxicabs scheduled to go into effect July 1, 2022 is moved up to July 1, 2021. The weight fee increase will be deposited in the Forward Washington Account.
License Fee by Weight for Light Duty Trucks. The additional $10 per year weight fee increase on light duty trucks scheduled to go into effect July 1, 2022 is moved up to July 1, 2021. The weight fee increase will be deposited in the Forward Washington Account until June 30, 2022 and then it will be deposited in various motor vehicle accounts.
Capital Vessel Surcharge. Beginning October 1, 2021, the Transportation Commission is directed to impose an additional $0.25 surcharge on every ferry fare sold and the proceeds will be deposited into the Capital Vessel Replacement Account. This would be in addition to existing $0.50 surcharge that is deposited in the Capital Vessel Replacement Account.
Trip Permit Fees. Beginning October 1, 2021, the three day trip permit fee is increased from $25 to $45 with the additional $20 being deposited into the Forward Washington Account.
Personal Trailer Fee. Beginning October 1, 2021, the annual license fee on private-use single-axle trailers of 2000 pounds scale weight or less is increased from $15 to $20. The fee increase will be deposited in the Forward Washington Account.
Title Fee and Quick Titles. Beginning October 1, 2021, the title fee is increased from $15 to $16. Beginning October 1, 2021, the quick title is increased from $50 to $55. The increases in the fees will be deposited in the Forward Washington Account.
Driver License Photo Only Fee. Beginning October 1, 2021, the fee for individuals wishing to correct information on a driver license or identicard, such as obtaining an updated photograph, is increased from $10 to $20. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Motor Home Vehicle Weight Fee. Beginning October 1, 2021, the motor home vehicle weight fee is increased from $75 per year to $95. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Service Fee and License Plate Technology Fees. Beginning October 1, 2021, light, medium and heavy duty trucks are made subject to the $0.50 license service fee and the $0.25 license plate technology fee. The additional license service fee revenue will be deposited in the Forward Washington Account. The additional license plate technology fee revenue will be deposited in the Forward Flexible Account.
Aircraft Fuel Tax. Beginning July 1, 2021, the aircraft fuel tax is increased from $0.11 per gallon to $0.16 per gallon. The revenue will be deposited in the Aeronautics Account.
Vehicle Look-Up Fee. Beginning October 1, 2021, vehicle look-up fee is increased from $2 to $4. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Driver Record Monitoring Fee. Beginning October 1, 2021, the driver record fee is increased from $0.06 to $0.08. The revenue from the fee increase will be deposited in the Forward Flexible Account.
Bulk Data Fee. Beginning October 1, 2021, the bulk data fee is $0.025 per record or $25 per 1000 records, to $0.05 per record or $50 per 1000 records.
Intermittent-Use Trailer Fee. Beginning October 1, 2021, the intermittent use trailer fee is increased from $187.50 to $200. The fee increase will be deposited in the Forward Washington Account.
Toll Exemptions. The authority for the Washington State Transportation Commission to provide toll exemptions is removed for:
Hazardous Substance Tax Distribution. The provision requiring termination of the $50 million per biennium transfer from hazardous substance tax collections to the Motor Vehicle Fund, upon passage of additive transportation act, is eliminated. This means that the $50 million per biennium transfer will continue even after enactment of an additive transportation act.
Auto Dealer Documentary Service Fee. Beginning July 1, 2021, the maximum authorized level for the optional auto dealer document service fee is increased from $150 to $200.
Tacoma Narrows Bridge Tolling. A total of $146 million in transfers from the Forward Washington Account to the Tacoma Narrows Bridge Account are made from fiscal year 2022 through fiscal year 2030. Statutory provisions are repealed relating to future toll rate increases for the Tacoma Narrows Bridge tolled facility and intended loans to the account, as the transfers should mitigate the need for both.
Forward Washington Account. The Forward Washington Account is created in the motor vehicle fund. The account is appropriated and can be used only for projects or improvements identified as Forward Washington projects or improvements in a transportation appropriations act, including any principal and interest on bonds authorized for the projects or improvements. The account is allowed to retain its own interest.
Forward Flexible Account. The Forward Flexible Account is created in the state treasury. The account is appropriated and can only be used only for transportation projects, programs, or activities identified as forward flexible projects, programs, or activities in a transportation appropriations act. The account is allowed to retain its own interest.
The committee recommended a different version of the bill than what was heard. Please refer to the April 12, 2021 recording of the public hearing on the Senate Transportation Committee Schedules, Agendas & Documents website at: https://app.leg.wa.gov/committeeschedules/#//TRAN/.