New law reduces sales tax on hydrogen vehicle purchases in Washington

A bill to promote hydrogen-powered vehicles is now a state law.

“Giving residents more access to purchase greener vehicles is one more way we can work together to lower greenhouse gas impacts across the state,” Gov. Inslee said, as he signed the bill.

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Senator Brad Hawkins sponsored the bill, SB 5000, which creates an eight-year statewide pilot project for the reduction of sales tax on purchases of fuel-cell electric vehicles.

“It’s had a long journey through five different committees, but it’s definitely generated a great deal of conversation throughout the process, and hydrogen as an issue has gained a lot of support,” he said.

Hawkins’ hydrogen vehicle legislation had bipartisan support and nearly 30 co-sponsors. It passed the Senate 49-0 in March and the House of Representatives 93-4 on April 10.

In 2019, the state Legislature approved another bill sponsored by Hawkins that authorizes public utility districts to produce and sell “renewable hydrogen.”

“The people of North Central Washington have been leaders in clean energy for decades and now we’re in a position to lead the United States on renewable hydrogen use in transportation, including production, distribution, vehicles, transit buses, short-haul agriculture, and long-haul opportunities. It’s pretty exciting when you think about it, especially knowing my region’s long and proud history of clean energy,” Hawkins said in a press release.

As the release explains, hydrogen can be created from a process that separates the hydrogen and oxygen molecules in water. The Douglas County Public Utility District plans to use its surplus hydropower to do just that, creating renewable hydrogen from excess renewable hydropower and possibly building hydrogen fueling stations. The PUD’s hydrogen production facility near East Wenatchee is expected to be completed toward the end of this year.

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The bill also extends an exemption on vehicle sales tax that those who purchase traditional electric vehicles receive, which Hawkins says will help establish parity between fuel-cell electric vehicles and plug-in electrics.

With the first hydrogen-fueling stations in Washington expected to be operational by 2022, the legislation will allow a total of 650 vehicles to receive a 50% sales tax exemption in fiscal years 2023 through 2029.

Hydrogen vehicles are newer to the market, but have shown promise in how quickly they refuel and the limited amount of infrastructure needed to get fuel to stations.