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WashingtonHB 20772025-2026 Regular SessionHouseWALLET

Establishing a tax on certain business activities related to surpluses generated under the zero-emission vehicle program.

Sponsored By: Joe Fitzgibbon (Democratic)

Became Law

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 0 benefits, 0 costs, 4 mixed.

Automakers report ZEV prices; data private

Ecology must send per-manufacturer ZEV credit data to Revenue by Oct 31 each year, starting with model year 2024. Manufacturers must also report the per-credit and total price for each sale by Oct 31 for the prior model year. Sales of 2023 credits made before May 20, 2025 are reported with 2024. Transaction-level prices are confidential. The state may publish only aggregated prices, at most quarterly, without revealing any single deal.

Manufacturers pay tax on surplus ZEV credits

Beginning May 20, 2025, manufacturers owe a new tax on surplus zero-emission vehicle (ZEV) credits. Sold credits are taxed at 2% of the reported sale price. Banked credits are taxed at 10% of the state’s average credit price, and are taxed again each year they stay banked. The tax does not apply to pooled credits moved to another state that follows California’s standards under federal law. A maker is exempt in a model year if its banked or sold credits are tied to fewer than 25,000 qualifying vehicles; at 25,000 or more, those credits are taxed.

Where ZEV tax money goes

Thirty percent of ZEV credit tax receipts go to the Electric Vehicle Incentive Account. The remaining 70% goes to the state general fund through June 30, 2027. Starting July 1, 2027, that 70% goes to the Carbon Emissions Reduction Account.

ZEV tax timing, rules, and penalties

Revenue calculates an average ZEV credit price each model year from reported sales; if a year has no sales, it uses the most recent average. Once published, the average for that year is final. Starting Nov 1, 2026, Revenue computes tax bills and notifies manufacturers by Jan 31 after the reporting year; 2024 and 2025 bills may be sent by Jan 31, 2027. Penalties and interest apply if a bill is unpaid by the due date. General state tax administration rules apply unless they conflict with this law; RCW 82.32.805 and 82.32.808 do not apply. Revenue may adopt rules.

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Sponsors & Cosponsors

Sponsor

  • Joe Fitzgibbon

    Democratic • House

Cosponsors

  • Nicole Macri

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 135 • No: 106

Senate vote • 4/26/2025

3rd Reading & Final Passage

Yes: 28 • No: 19 • Other: 1

House vote • 4/22/2025

Motion to Place Measure on 3rd Reading & Final Passage

Yes: 55 • No: 42 • Other: 1

House vote • 4/22/2025

3rd Reading & Final Passage

Yes: 52 • No: 45 • Other: 1

Actions Timeline

  1. Effective date 5/20/2025.

    5/20/2025House

  2. Chapter 419, 2025 Laws.

    5/20/2025House

  3. Governor signed.

    5/20/2025legislature

  4. Delivered to Governor.

    4/27/2025legislature

  5. Speaker signed.

    4/27/2025legislature

  6. President signed.

    4/27/2025legislature

  7. Third reading, passed; yeas, 28; nays, 19; absent, 0; excused, 1.

    4/26/2025House

  8. Rules suspended. Placed on Third Reading.

    4/26/2025House

  9. Placed on second reading by Rules Committee.

    4/25/2025House

  10. Passed to Rules Committee for second reading.

    4/25/2025House

  11. Minority; do not pass.

    4/25/2025House

  12. WM - Majority; do pass.

    4/25/2025House

  13. First reading, referred to Ways & Means.

    4/22/2025House

  14. Third reading, passed; yeas, 52; nays, 45; absent, 0; excused, 1.

    4/22/2025House

  15. Rules suspended. Placed on Third Reading.

    4/22/2025House

  16. 1st substitute bill substituted.

    4/22/2025House

  17. Minority; do not pass.

    4/19/2025House

  18. FIN - Majority; 1st substitute bill be substituted, do pass.

    4/19/2025House

  19. FIN - Executive action taken by committee.

    4/19/2025House

  20. Placed on second reading.

    4/19/2025House

  21. First reading, referred to Finance.

    4/14/2025House

  22. Introduced

    4/14/2025House

Bill Text

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