SEATTLE – Looking for ways to boost the use of clean-fuel cars in Washington state, Gov. Jay Inslee wants to extend a sales tax break for electric vehicles and explore giving them access to car pool lanes.
Supporters say electric cars cut carbon pollution and help reduce the country’s reliance on fossil fuels. But some question whether people who drive all-electric cars should get preferences – in their wallets or on the state’s highways.
Inslee is promoting electric vehicles as part of a broader effort to tackle climate change. The governor said he wants to install more charging stations and create incentives for builders to include high-speed charging in projects.
He outlined his ideas at a clean-energy conference in early November, but he has not released specific proposals. That’s likely to come with his proposed budget in December.
Rep. Reuven Carlyle, D-Seattle, who heads the House Finance Committee, said he has concerns about extending the tax break, which expires July 1.
“I’m not enthusiastic about a subsidy that picks winners and losers and doesn’t help the middle class,” he said.
Sen. Mark Mullet, D-Issaquah, has been driving his Tesla since 2009 and is an enthusiastic supporter. He recently helped form a bipartisan electric vehicle legislative caucus to promote the vehicles and create economic development around the issue.
“There are definitely clean air benefits. It’s a huge win,” he said. If people back the technology, it would spur innovations that ultimately could make electric vehicles available to more people, Mullet added.
Others question whether the state should be subsidizing buyers who can afford luxury all-electric cars. Some lawmakers have suggested putting a cap on the value.
“Tell me that a person that buys a Tesla for $70,000 or $80,000 shouldn’t have to pay sales tax? They can afford to pay that kind of money; why aren’t they paying the sales tax?” said Sen. Curtis King, who co-chairs the Transportation Committee, though he added that he would have to analyze the break before making a firm decision.
Consumers who buy vehicles powered exclusively by fuels such as natural gas, hydrogen, propane or electricity currently don’t pay state sales tax, which ranges from 7 percent to 9.6 percent depending on location.
It is not clear how many people have gotten that tax break, because the state revenue department does not track it.
If the break is extended, it would mean a nearly $13 million hit in tax revenues in fiscal year 2016, and $17 million in 2017, according to most recent estimates by the Department of Revenue. That’s based on about 7,150 cars, with 40 percent Nissan Leafs, 18 percent Tesla Model S and others.
Washington is among the leading states with the highest number of electric cars, but it’s not alone in providing some incentive to buyers to boost sales.
At least 37 states and the District of Columbia have incentives, such as allowing HOV access, offering parking and financial incentives or utility rate breaks, according to the National Conference of State Legislatures.
Supporters say the tax break helps by bringing the purchase price closer to gasoline cars. Both Republican and Democrat lawmakers sponsored bills during the last legislative session to extend the sales tax break.
Washington state has a goal to put 50,000 electric or other clean vehicles on the road by 2020. There are nearly 10,000 plug-in hybrids and electric vehicles registered in the state, with about 7,000 all-electric.
Mullet said he is leaning toward allowing buyers to get half of the sales tax break and ensuring that money goes toward adding more charging stations in the state. He doesn’t favor giving them HOV access, however, because those lanes already are crowded, he said.
Jeff Finn, who converted a Chevrolet Metro into an all-electric and whose wife owns a Nissan Leaf, said the benefits are many. Because they have zero tailpipe emissions, they cut back on pollutants that are discharged into the air and that also run off into waters, he said.
“These are all things that affect our health,” he said. “We end up paying for it in other ways in increased health care costs.”
Local journalism is essential.
Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.
Subscribe now to get breaking news alerts in your email inbox
Get breaking news delivered to your inbox as it happens.