(The Center Square) – Washington state has given 25,276 sales and use tax exemptions for electric vehicles since 2019 to reduce greenhouse gas emissions, costing $27.9 million.
The exemption aims to help reduce GHG emissions by 45% by 2030 and 70% by 2040 because vehicle emissions are the largest contributor to GHGs, an executive order says.
Mikhail Carpenter, Communications Manager at the Washington State Department of Revenue told The Center Square in an email that “$430 million represents the total non-taxable amount deducted from the qualified EV purchases to obtain the sales and use tax exemption of $27 million.”
A report shows vehicle purchases and more from August 1, 2019, the start date of the exemption, to April 10, 2023. Estimated future lease costs are $149,787.
State data show in 2010, four hybrids were registered statewide. In 2022, residents registered 92,694 EVs, counting renewals and new registrations.
In 2022, Gov. Jay Inslee signed legislation targeting a 100% EV mandate by 2030. Inslee signed an executive order requiring some state fleets to transition to EVs. The order requires 40% of fleets to be battery electric vehicles by 2025, 75% of fleets to be BEVs by 2030, and 100% of fleets to be BEVs by 2035.
Inslee spokesperson Mike Faulk said the tax exemption alone isn’t enough to change buying behavior.
“The tax exemption is not significant enough to drive the level of change in buying behavior and adoption rate we need to meet statutory greenhouse gas emissions limits, which is why the governor proposed a point-of-sale rebate program in his 2022 budget,” Faulk told The Center Square in an email.
In 2022, the governor signed the $17 billion “Move Ahead Washington” transportation package. The Legislature appropriated over $1 billion toward EVs, including charging infrastructure funding.
As of 2022, federal data say 104,050 EVs, 31,400 plug-in-electric hybrids, and 270,200 hybrid electrics are registered in Washington. The state has 5.6 million gasoline vehicles, 277,400 diesel vehicles, 348,300 E85 vehicles, and 67,500 biodiesels.
New EVs bought nearly tripled between 2013 and 2018, and in 2021, reached nearly 20,000 registered in one year.
In 2019, Washington reinstated the sales and use tax exemption for vehicles powered by a clean alternative fuel and certain plug-in hybrids. The exemption applies to dealer and private sales of new, used, and leased vehicles sold on or after August 1, 2019, based on the following criteria:
New vehicle transactions can’t exceed $45,000 in purchase price or lease payments.Used vehicle transactions must not exceed $30,000 in fair market value or lease payments.Using a trade-in to lower the price is prohibited.
Carpenter told The Center Square in an email that it doesn’t have demographic data on the people using the rebate program. The exemption is up for a full review in 2024.
The below graph show the most common types of vehicles tapped for the rebate.
