Washington legislature passes EV credit tax targeting Tesla

Substitute House Bill (SHB) 2077 passed the Washington State Legislature over the weekend.

SHB 2077 is an EV credit tax bill that 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 Washingtonians 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.

“We never intended for this program to be a source of windfall profits for one manufacturer,” Rep. Joe Fitzgibbon (D-Seattle), the bill’s prime sponsor, said as reported by KING 5.

Critics argue Tesla tax could scare off EV investors

Opponents warn it could backfire. Taxing what’s essentially a regulatory tool, they argue, might scare off EV investments and raise prices for consumers.

However, according to KING 5, the bill will only affect Tesla—for now.

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.

Contributing: Matt Markovich, KIRO Newsradio; Julia Dallas, MyNorthwest

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