WA’s midnight tax storm: House pushes through big business hit, Tesla tax
Apr 22, 2025, 4:00 PM | Updated: Apr 29, 2025, 11:37 am
Employees walk through a lobby at Amazon's headquarters in Seattle. (File photo: Elaine Thompson, AP)
(File photo: Elaine Thompson, AP)
It was a night (and early morning) full of drama, division, and dollar signs in the Washington House of Representatives. Lawmakers passed three high-stakes bills during a marathon session that wrapped up in the wee hours of Tuesday morning.
Each bill barely crossed the finish line—and each one’s controversial enough to spark even more debate as the Legislature scrambles to wrap up the session by Sunday.
One bill takes a big swing at corporate taxes with a major overhaul that critics say could send businesses out of state. Another bill targets EV manufacturers profiting from carbon credits. Another reshapes (but tones down) school tax reform.
Together, the three paint a picture of a Legislature led by Democrats trying to juggle climate goals, school funding, and budget shortfalls—all while dodging a growing storm of political blowback.
Big biz, bigger tax bill
The headline-grabber: ESHB 2081, a sweeping corporate tax hike, passed 52–48, with nine Democrats defecting from their rank and joining all republicans in voting against the bill.
The bill adds a temporary 0.5% surcharge on businesses making over $250 million in Washington. Lawmakers say the money is sorely needed for public schools, health care, and social services.
For tech giants (looking at you, Amazon and Microsoft), there’s more. You will see their Business and Occupation tax rate take a huge jump from 1.22% to 7.5%. Their payment cap also skyrockets from $9 million to $75 million. Big banks aren’t spared either, with their rate rising from 1.2% to 1.5%.
Supporters call it long overdue—a much-needed patch for Washington’s regressive tax code.
Critics? They’re calling it a sledgehammer. Business groups warn it’ll drive companies out of the state and spook future investments.
The bill is set for a final vote in the Senate Ways & Means Committee at 1:30 p.m. Friday, with no public hearing scheduled. It’s on the fast track. If it passes the full Senate before Sunday, it’s off to the governor for his approval—or veto.
Carbon Credit profits? New EV carmaker tax
SHB 2077, the EV credit tax bill squeaked through with a 52–45 vote. Six Democrats joined all Republicans in voting no.
The bill slaps new excise taxes on car manufacturers that either sell or bank more than 25,000 zero-emission vehicle (ZEV) credits per year. Translation? If you’re making serious money off selling the idea of going green, the state wants its cut.
Sold credits get taxed at 2%. Banked ones? A juicier 10% based on average value. The idea is to use that cash to help regular folks afford EVs and to boost charging infrastructure.
Supporters say it’s about fairness, preventing companies like Tesla and Rivian from making a fortune selling credits to automakers that don’t produce EVs themselves.
Opponents warn it could backfire. Taxing what’s essentially a regulatory tool, they argue, might scare off EV investments and raise prices for consumers.
A fiscal note projects the bill could bring in $78 million over the next two years and a whopping $400 million over the following four.
The bill is set for a final vote in the Senate Ways & Means Committee at 1:30 p.m. Friday, with no public hearing scheduled. It’s on the fast track. If the Senate approves and the governor signs it (there’s an emergency clause), it would take effect immediately.
Education funding overhaul hits the brakes (But doesn’t stop)
Next: ESHB 2049 started as a bold attempt to revolutionize school funding and ended up as a much tamer version. It passed 50–48, with nine Democrats siding with Republicans in voting no.
Originally, the bill aimed to loosen property tax limits and boost inflation-adjusted funding for under-resourced school districts. But after some intense backroom negotiations, those major reforms got scrapped.
This was supposed to be one of the bill’s cornerstone features, aimed at giving local governments more wiggle room to raise funds for public schools. But now, that part’s gone.
The House also axed a plan to add an “inflation enhancement” that would have helped lower-income school districts raise money when their local property values don’t cut it. Also gone: a specific definition of inflation tied to the Seattle Consumer Price Index. The bill now uses the Implicit Price Deflator, a more general national economic metric, instead.
Translation? The changes that would’ve potentially given schools more money, especially in areas that struggle to raise funds locally, have been shelved.
RELATED STORIES
Despite those rollbacks, the bill still makes some meaningful updates to the school funding system. The existing $2.50 per $1,000 cap on enrichment levies (that’s local taxes used for extras like arts, athletics, or special programs) stays in place.
But it comes with some tweaks to how the per-student funding cap is calculated—starting in 2031, it’ll jump to $5,035 per student, adjusted annually for inflation. That’s a decent increase from today’s levels, though it’s further down the road and doesn’t bring immediate relief.
The bill shares the same Senate schedule as the big business bill, with a hearing Wednesday and a committee vote Friday.
The bottom line
Three big bills. Three razor-thin votes. And one Legislature clearly straining to solve big problems in a politically divided house.
The wild card in all this? Washington Governor Bob Ferguson—a Democrat, yes, but one who’s shown he won’t rubber-stamp every bill the Democratic-led Legislature sends his way. And with the clock ticking toward Sunday’s deadline, all eyes are on what he’ll do next.
Matt Markovich is the KIRO Newsradio political analyst. Follow him on X. Read more of his stories here.
