RCW 82.17.030 — Tax on the banking and sale of surplus ZEV credits — Penalties and interest

*** CHANGE IN 2026 *** (SEE 2251-S2.SL ) *** (1) Beginning May 20, 2025, for purposes of model year 2024 program implementation, an excise tax is imposed on the banking and sale of surplus ZEV credits as verified by the department of ecology for each model year. The excise tax imposed under this section does not apply to pooled surplus ZEV credits. (a) For a ZEV credit sold to another manufacturer, the amount of the tax with respect to such sale is equal to the credit sales price reported under RCW 82.17.020 multiplied by a rate of two percent. (b) For a ZEV credit banked by a manufacturer, and thus considered sold under this chapter, the amount of tax with respect to the privilege of holding a banked ZEV credit for use in a future model year is equal to the average ZEV credit price calculated by the department under subsection (3) of this section, multiplied by the rate of 10 percent. For purposes of the tax imposed under this chapter, a banked ZEV credit held at the start of the next model year is considered sold. (2) For each year of zero-emission vehicle program implementation that a ZEV credit is banked or continues to be banked, the manufacturer must pay the tax specified in subsection (1)(b) of this section. The tax in subsection (1)(b) of this section applies to banked credits that were generated prior to model year 2024 that continue to be banked during implementation of the program for purposes of model year 2024 or subsequent model years. (3) Based on the ZEV credit sales prices reported to the department under RCW 82.17.020 : (a) For each model year, the department must calculate the average ZEV credit price and share this information with the department of ecology for publication. The average ZEV credit price for a model year must be calculated by aggregating the reported sales prices of ZEV credits under RCW 82.17.020 by all manufacturers that reported transactions for the model year. If there were no transactions of ZEV credits reported to the department for a specific model year, the department must apply the average ZEV credit price for the most recent model year for which such data are available for purposes of that specific model year. (b) Beginning November 1, 2026, and each year thereafter, the department must calculate the amount of the tax by each manufacturer due under this section. The department must notify the manufacturer of their tax liability for the most recent reporting year no later than January 31st of the immediately following calendar year, except that the department may notify the manufacturer of their tax liability for both model year 2024 and model year 2025 no later than January 31, 2027. (c) Once the average ZEV credit price has been calculated and is published to the department of ecology's website, the amount is considered final and cannot be altered based on amended information received by the department from the department of ecology or a participating manufacturer. (4) Penalties and interest under chapter 82.32 RCW will apply to any tax liability not paid by the due date of the notice of tax liability under subsection (3) of this section. (5) The proceeds from the tax imposed under this chapter must be deposited as follows: (a) 30 percent to the electric vehicle incentive account created in RCW 43.330.365 ; (b)(i) Until June 30, 2027, 70 percent to the state general fund; and (ii) Beginning July 1, 2027, 70 percent to the carbon emissions reduction account created in RCW 70A.65.240 . [ 2025 c 419 s 4 .] Notes: Findings — Intent — 2025 c 419: "The legislature finds that the zero-emission vehicle program is a key policy supporting state efforts to achieve greenhouse gas emissions reductions required in RCW 70A.45.020 . The advanced clean cars and advanced clean cars II components of the zero-emission vehicle program require manufacturers of passenger cars and light duty trucks to achieve an escalating minimum percentage of zero-emission vehicles for sale or lease in Washington, or to obtain surplus credits from an auto manufacturer that has exceeded this minimum compliance obligation. By providing for the creation of these tradeable and bankable credits, the program creates an incentive for vehicle manufacturers to maximize their investments in developing and selling cleaner cars. The legislature also finds that the creation of these tradeable and bankable credits creates the opportunity for a financial windfall accruing to firms that are not burdened by the legacy production of internal combustion engine vehicles that make a compliance obligation more difficult under the program. Therefore, it is the intent of the legislature to address this unintended outcome by taxing the windfall profits from the generation of surplus zero-emission vehicle credits and reinvesting those funds in other programs and incentives that promote cleaner vehicles that further state climate goals." [ 2025 c 419 s 1 .] Tax preference performance statement exemption — Automatic expiration date exemption — 2025 c 419: "RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2025 c 419 s 7 .] Application — 2025 c 419: "This act applies to ZEV credits banked or sold after May 20, 2025, and thereafter." [ 2025 c 419 s 10 .] Effective date — 2025 c 419: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 20, 2025]." [ 2025 c 419 s 12 .]