All Roll Calls
Yes: 170 • No: 67
WashingtonHB 27112025-2026 Regular SessionHouseWALLET
Concerning transportation resources.
Sponsored By: Jake Fey (Democratic)
Became Law
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Bill Overview
Analyzed Economic Effects
32 provisions identified: 11 benefits, 14 costs, 7 mixed.
New luxury tax on high-value cars
The law adds an 8% tax on the part of a vehicle’s value above a set deduction. The deduction is $100,000 for fiscal year 2026 and rises 2% each July 1, rounded to the nearest dollar. For leases with periodic payments, the total tax can be split across the scheduled payments. If a lease ends early, any unpaid tax is due at once. The lessor must collect and send the tax.
Personal liability for unpaid trust taxes
If a business is terminated, dissolved, abandoned, or insolvent, the Department of Revenue can collect unpaid trust‑fund taxes from responsible individuals. Current or former CEOs and CFOs are personally liable even without fault. Other responsible people are liable if they willfully failed to remit the taxes.
Vehicle tax penalty relief for businesses
The Department of Revenue waives penalties and interest on the additional motor vehicle taxes for periods through June 30, 2026, if you qualify. You must file amended or outstanding returns and pay in full or enter a payment plan. You also must have filed and paid on time for the prior 24 months and have no past evasion or reseller‑misuse penalties. Apply by September 30, 2027. This relief does not cover periods starting on or after July 1, 2026, and ends January 1, 2029.
Bus grants prioritize equity and regions
Grant picks for buses now use environmental justice. The aim is to send more funding to overburdened and vulnerable communities. The Department must also consider geographic diversity so funds reach more areas. An advisory committee helps write grant rules and gives stakeholder input.
Transit bus grants with spending limits
The transportation department runs a competitive grant program for transit agencies. Money can buy buses, build or fix bus facilities, add safety upgrades, and retrofit for new tech. Grant funds cannot pay for armed security. No single grantee can receive more than 35% of the program’s funds in a biennium.
New fund for clean aviation fuel sites
The law creates a state account for sustainable aviation fuel projects at airports. Named receipts go into this account. Money can be spent only after appropriation and only on aviation fuel infrastructure and preservation.
Sales and use taxes shift to transportation
Starting July 1, 2027, 0.1% of each retail sale’s price and 0.1% of use‑tax value go to the multimodal transportation account. This change does not raise the sales or use tax rate. It redirects a small share of state tax collections to transportation funding.
How the state shares investment earnings
The state deposits investment earnings from surplus balances into a treasury income account. Each month, most earnings go to the general fund, while many named accounts get a share based on their average daily balance; some listed funds get 80% of their share. Earnings from several permanent funds go to their beneficiary accounts. The account can pay bank service fees and federal cash‑management obligations before distributing earnings. Agencies that deposit money with the treasurer under agreement receive a proportional share of earnings.
Investment earnings rules change in 2030
Starting July 1, 2030, the treasurer can manage trust fund investments the same way as state treasury funds and commingle them for cash management. All investment income from the trust fund goes into a new investment income account. Each month, earnings go mainly to the general fund, while named accounts get proportional shares based on average daily balances; certain accounts get 80% of their share. The account can pay bank service fees before distributions and without a separate appropriation. Agencies that deposit funds under agreement receive their proportional share of earnings.
Extra tax on high priced vehicles
The law adds an 8% tax on the value of a vehicle above the deduction amount when the price or lease value is over $100,000. For purchases, it applies to the selling price plus any like‑kind trade‑in; for leases, it uses the value at lease start. Commercial vehicles and vehicles over 10,000 pounds (not motor homes) are exempt, and motor homes are exempt July 1–December 31, 2026. The money goes to the multimodal transportation account.
Higher taxes on vehicles and boats
Beginning January 1, 2026, car rentals include an extra tax: 11.9% through 2026 and 9.9% from 2027. Retail motor vehicle purchases pay an added 0.5% tax on the selling price. Recreational boats that owe the watercraft excise tax also pay an extra 0.5%. Some vehicles are excluded or exempt: farm tractors (except for cannabis), off‑road and nonhighway vehicles, snowmobiles, commercial vehicles and those over 10,000 pounds, and motor homes from July 1–December 31, 2026. Revenue from these taxes goes to the state multimodal transportation account.
State sales and use tax rules
The state charges a 6.5% sales tax on most retail purchases. Washington also charges a use tax when you use goods, some services, software, or digital items in the state and no sales tax was paid. The tax is based on the selling price or the item’s value.
How state investment earnings are shared
Until July 1, 2030, the treasurer distributes most investment earnings monthly to the general fund, with exceptions named in law. Agencies that deposit their own funds with the treasurer receive a share of earnings based on average daily balance. Trust‑fund money can be invested and pooled like treasury money, and its earnings go to an investment income account. Named accounts receive proportionate earnings; some transportation‑related funds receive 80% of their proportional share.
$5 state ID for seniors in 2028
Beginning January 1, 2028, drivers age 70 or older can get a state ID for $5 if they replace their driver’s license. The $5 fee covers one identicard issuance. You must be expected to live in Washington. Enhanced IDs still require the extra steps in state law.
Bus grants can't favor fuel type
Grant reviewers for bus and bus‑facility projects cannot score applications based on fuel type. Projects are not helped or hurt just for choosing a certain fuel.
More transportation funding from fuel taxes
The state deposits luxury vehicle tax revenue and additional vehicle use tax revenue into the multimodal transportation account. For certain fuel taxes, 2.5% goes to cities, 2.5% to counties, and the rest to the state motor vehicle fund. This directs more money to statewide and local transportation projects.
Sales tax funds state performance audits
Since December 8, 2005, 0.16% of certain state sales tax collections goes to the performance audits account. This pays for statewide audits of government performance.
Ferry trips add card payment fee
Washington State Ferries adds a payment fee of at least 3% when you pay by credit, debit, or similar method. The fee is shown at checkout and itemized on your receipt. Recovered costs are not counted as fare revenue.
Five dollar fee per new tire
You pay $5 for each new replacement vehicle tire you buy. The seller collects the fee and sends it to the state. Retreaded tires are not charged.
Fuel tax increases 2% each year
Beginning July 1, 2026, the per‑gallon fuel tax is recalculated each July 1. The formula adds a 2% increase to referenced fuel tax rates. The exact change per gallon depends on other fuel tax rates in law.
Higher gas tax starting July 2025
Starting July 1, 2025, the state fuel tax rises by $0.06 per gallon. Drivers pay more at the pump. To estimate your added yearly cost, multiply your annual gallons by $0.06.
New tire fee reporting for retailers
Tire retailers must report the number of new replacement tires sold and the fee on their business excise tax return. The Department of Revenue checks these counts and fees in its regular audits. This adds reporting work and audit review for sellers.
Aircraft registration fees rise yearly
Beginning January 1, 2028, aircraft registration fees increase by 2% each year. The fee is rounded to the nearest dollar.
Extra tax on business car sharing
Beginning January 1, 2027, peer‑to‑peer car sharing is taxed at the same rate as retail car rentals (9.9%) when the owner acquired the car with a reseller permit or approved exemption. The money goes to the multimodal transportation account.
Higher diesel taxes in 2025 and 2027
Special fuel (like diesel) taxes go up by $0.03 per gallon on July 1, 2025. They rise another $0.03 per gallon on July 1, 2027. Fleets and fuel-heavy businesses can estimate added cost by multiplying gallons by $0.03 for each step (total $0.06 by 2027).
Fuel tax rate indexed each year
Starting July 1, 2028, the special fuel tax adds an indexed per‑gallon rate that is recalculated each July 1. The formula includes a 2% escalation and rounding. The exact amount depends on other rates in law.
Photo toll rules, penalties, and relief
Photo‑toll penalties are $40 plus the unpaid toll and fees, but they do not go on your driving record. DOT must let you show proof of problems like hospitalization or deployment, and adjudicators can reduce or dismiss penalties. First‑time late‑pay customers may get waivers or reductions after fixing the issue and setting up an electronic toll account. Cameras may image only the vehicle and plate; locations must be signed; bills and notices must be clear, and images are available for review. DOT must support online and mobile toll account access, link to vehicle records with your consent, and send apology letters for plate‑read errors.
Toll notice rules for rental cars
When the vehicle owner is a rental car business, the transportation department must send written notice before billing a toll. The company has 30 days to name the driver and address, show the car was stolen, or pay the toll and fee. If the company mails the required statement on time, it is not liable for the toll.
New aircraft fees and luxury tax ended
The state sets aircraft registration fees by aircraft type (for example, $120 for a single‑engine fixed‑wing). Part 1 fee receipts go to the aeronautics account for airport grants; Part 2 receipts go to the sustainable aviation fuel account. The prior luxury aircraft tax is repealed.
Start and end dates for transportation rules
The law sets start and end dates for certain transportation sections. Tow‑truck impound sections 1307–1309 take effect July 1, 2027. Sections 1301–1305, 1307, and 404 expire on listed dates from July 1, 2028 through July 1, 2031, with some tied to when RCW 74.76.040 expires.
Cities can join transit districts by agreement
A transit benefit area may annex a nearby city that runs its own transit system. Both governments must adopt an interlocal agreement, hold public hearings, and set an effective date. Local taxes, service, and governance can change based on that agreement.
When parts of this law start
Some sections take effect on set dates. Sections 401, 408, 601, and 1201 take effect immediately. Sections 101, 102, 201–203, 301, and 302 start July 1, 2026. Sections 402 and 403 start November 1, 2026. Sections 404, 406, and 407 start January 1, 2027. Sections 1303 and 1304 start July 1, 2028. Sections 1305 and 1306 start January 1, 2029. Section 1308 starts July 1, 2030. Section 405 starts July 1, 2031. Section 1302 starts when RCW 74.76.040 expires.
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Sponsors & Cosponsors
Sponsor
Jake Fey
Democratic • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 3/11/2026
Final Passage as Amended by the Senate
Yes: 54 • No: 42 • Other: 2
Senate vote • 3/11/2026
3rd Reading & Final Passage as Amended by the Senate
Yes: 33 • No: 15 • Other: 1
House vote • 2/28/2026
3rd Reading & Final Passage
Yes: 83 • No: 10 • Other: 5
Actions Timeline
Chapter 255, 2026 Laws.
3/31/2026HouseGovernor signed.
3/31/2026legislatureEffective date 6/11/2026*.
3/31/2026HouseSpeaker signed.
3/12/2026legislatureDelivered to Governor.
3/12/2026legislaturePresident signed.
3/12/2026legislaturePassed final passage; yeas, 54; nays, 42; absent, 0; excused, 2.
3/11/2026HouseHouse concurred in Senate amendments.
3/11/2026HouseThird reading, passed; yeas, 33; nays, 15; absent, 0; excused, 1.
3/11/2026HouseRules suspended. Placed on Third Reading.
3/11/2026HouseFloor amendment(s) adopted.
3/11/2026HouseCommittee amendment not adopted.
3/11/2026HousePassed to Rules Committee for second reading.
3/5/2026HousePlaced on second reading by Rules Committee.
3/5/2026HouseMinority; without recommendation.
3/4/2026HouseMinority; do not pass.
3/4/2026HouseTRAN - Majority; do pass with amendment(s).
3/4/2026HouseFirst reading, referred to Transportation.
3/2/2026HouseThird reading, passed; yeas, 83; nays, 10; absent, 0; excused, 5.
2/28/2026HouseRules suspended. Placed on Third Reading.
2/28/2026HouseFloor amendment(s) adopted.
2/28/2026House1st substitute bill substituted.
2/28/2026HouseRules Committee relieved of further consideration. Placed on second reading.
2/27/2026HouseReferred to Rules 2 Review.
2/25/2026HouseTR - Majority; 1st substitute bill be substituted, do pass.
2/25/2026House
Bill Text
Session Law
4/2/2026
Bill as Passed Legislature
3/12/2026
Engrossed Substitute
2/28/2026
Substitute Bill
2/27/2026
Original Bill
2/2/2026
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