wa-law.org > bill > 2025-26 > SB 5795 > Original Bill

SB 5795 - Sales and use tax rate

Source

Section 1

  1. Many Washingtonians do not earn enough annually to keep pace with increasing costs of housing, health care, child care, and other essential expenses. Amidst rising cost-of-living across the state, the regressive nature of Washington's tax code puts an additional strain on households already struggling to meet their basic needs.

  2. The legislature finds that Washington state is heavily reliant on excise taxes, including sales and use taxes, and more progress is needed for the state to have a fair and balanced tax system. Washington's tax system remains the second most regressive in the nation as it requires those with the least to pay the most as a percentage of their income. Low-income Washingtonians pay at least three times more in state and local taxes as a percentage of their income than the state's highest-income households. By lowering the sales tax, this reduction in tax responsibility will help reduce one of the key drivers of regressivity in our tax code, taking a significant step toward reducing the disproportionate impact on low and middle-income households, and promoting economic stability and well-being for all Washingtonians.

Section 2

  1. There is levied and collected a tax equal to six 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;

    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.

Section 3

This act takes effect January 1, 2027.

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