New Road Use Tax Coming?

A recent issue of the IBA Small Business Report shared the following information on a potential Road Use Tax for Washington. Here is what you need to know.

Since Electric Vehicles (EVs) made up 11.7% of new car sales in King County, 7.8% in Washington, and 4.4% nationally as reported on KUOW radio

The 2023 Legislature is looking for new ways to fund the state’s transportation system and is considering a Road Use Charge “Tax” that would replace the state’s current gasoline and diesel tax of 49.4-cents per gallon when you fuel your vehicle with a petroleum-based fuel. 

The Road Use Charge being considered is 2.4-cents per mile driven. SB 5574 proposes to start this new Road Use Charge (RUC) on July 1, 2027. The 5+ page SB 5574 has no tax rate in it and the July 1, 2027 date gives the Departments that would implement this tax the authority to implement this new RUC tax with the RUC tax rate to be set by a later Legislature. 

SB 5574 has not had a hearing as yet and likely will not have a hearing and is technically dead. 

The Washington State Department of transportation conducted a pilot study with real Washington State drivers to test the “Road Use Charge” concept and get driver reactions. Below is a summary of the pilot study reactions by drivers.

Pilot study:

  • Over 15 million miles reported and mock-charged at 2.4 cents per-mile. 
  • 3 surveys, 6 focus groups, and a project help desk that actively gathered feedback. 
  • Nearly 1,900 emails and phone calls were received from test drivers (67%) and members of the public (33%). 

Top concerns and questions included:

  • Privacy and data collection
  • Compliance and administration costs
  • Fairness and equity
  • Travel between states
  • Operational viability

At this time, the Road Use Tax is technically dead in the 2023 Legislature but it can be brought back to life before the Legislature goes home.

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