House Finance hears proposal to tax surplus ZEV credits, divide revenue for EV incentives and state funds

Under House Bill 2,077, an excise tax would apply to the sale and banking of surplus zero-emission-vehicle (ZEV) credits, with revenues split between electric vehicle incentive accounts and the state general fund before later routing some funds to a carbon emissions reduction account.

The bill would impose a 2 percent excise tax on transactions where a ZEV credit is sold to another manufacturer and a 10 percent tax on the privilege of banking (holding) a ZEV credit. For credits a manufacturer 'pulls' (uses) the bill treats pulled credits as sold and generally applies a 10 percent rate; the bill modifies that rate for the model-year-2025 ZEV program to 50 percent unless a manufacturer demonstrates delivery or sale in Washington at parity with its average Section 177 state deliveries, in which case the rate would be 10 percent. The bill exempts certain small-volume activity and requires reporting and Department of Revenue calculations and notices of tax…