wa-law.org > bill > 2025-26 > HB 1986 > Original Bill

HB 1986 - Vehicles for rental/tax

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Section 1

  1. There is levied and collected a tax equal to six and five-tenths percent of the selling price on each retail sale in this state of:

    1. Tangible personal property, unless the sale is specifically excluded from the RCW 82.04.050 definition of retail sale;

    2. Digital goods, digital codes, and digital automated services, if the sale is included within the RCW 82.04.050 definition of retail sale, except as provided in subsection (8) of this section;

    3. Services, other than digital automated services, included within the RCW 82.04.050 definition of retail sale;

    4. Extended warranties to consumers; and

    5. Anything else, the sale of which is included within the RCW 82.04.050 definition of retail sale.

  2. There is levied and collected an additional tax on each retail car rental, regardless of whether the vehicle is licensed in this state, equal to five and nine-tenths percent of the selling price. The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070.

  3. Beginning July 1, 2003, there is levied and collected an additional tax of three-tenths of one percent of the selling price on each retail sale of a motor vehicle in this state, other than retail car rentals taxed under subsection (2) of this section. The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070.

  4. For purposes of subsection (3) of this section, "motor vehicle" has the meaning provided in RCW 46.04.320, but does not include:

    1. Farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, unless the farm tractor or farm vehicle is for use in the production of cannabis;

    2. Off-road vehicles as defined in RCW 46.04.365;

    3. Nonhighway vehicles as defined in RCW 46.09.310; and

    4. Snowmobiles as defined in RCW 46.04.546.

  5. Beginning on December 8, 2005, 0.16 percent of the taxes collected under subsection (1) of this section must be dedicated to funding comprehensive performance audits required under RCW 43.09.470. The revenue identified in this subsection must be deposited in the performance audits of government account created in RCW 43.09.475.

  6. The taxes imposed under this chapter apply to successive retail sales of the same property.

  7. The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

  8. Notwithstanding the exclusion of purchases for the purpose of resale in the definition of retail sale in RCW 82.04.050, taxes imposed by this chapter apply to the sale of a motor vehicle to a person who purchases the motor vehicle solely for use in retail car rentals.

Section 2

This act supersedes, preempts, and invalidates any state regulation, including WAC 458-20-180(11), to the extent that it conflicts with this act.

Section 3

This act applies to sales of motor vehicles for use in retail car rentals occurring on or after October 1, 2025.

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