Tax avalanche: WA’s new transportation bill hits drivers where it hurts

Hold onto your wallets, Washington drivers—more changes are on the horizon, and they’re not exactly small ones.

The state House of Representatives is preparing to roll out a major overhaul to ESSB 5801, a transportation funding bill that’s about to get bulked up with a laundry list of tax hikes, fee increases, and infrastructure investments.

The bill, already hefty when it left the Senate, will undergo a turbocharged “striking amendment” in the House on Wednesday during a meeting of the House Transportation Committee.

While the Senate’s version had a public hearing in that committee on Tuesday, the discussion might end up being somewhat moot. Why? Because this striking amendment—essentially a full rewrite of the Senate bill—can only be proposed during an executive session, not in public hearings.

Here’s what’s being proposed in what is effectively the House’s new version of the bill:

Gas up, pay up

Starting July 1, 2025, the gas tax jumps 6 cents per gallon, bumping the rate from 49.4 cents to 55.4 cents. That part hasn’t changed from the original Senate bill.

Diesel drivers? You’re not off the hook. Diesel sees a 6-cent total hike—3 cents in 2025 and another 3 cents in 2027.

And that’s not the end of it. Beginning in 2026, most fuel taxes will automatically increase 2% per year due to inflation. Diesel gets its own inflation-based increases starting in 2028.

Where’s all that money going? Mostly into the Motor Vehicle Fund, with 2.5% going to cities and another 2.5% to counties—same as in the Senate version.

One notable change? The House version ditches the electric and hybrid vehicle fee increases proposed in the Senate. The Senate had called for boosting the annual fee from $100 to $150 and adding extra charges for new registrations. The House said “no thanks” to that.

Fee-nomenon

Almost every vehicle-related fee is going up. Starting in 2026, truck weight fees will be standardized to $30 per ton. Passenger car weight fees will also increase:

• Up to 4,000 lbs.: Still $35
• 4,001–6,000 lbs.: Now $65
• 6,001–8,000 lbs.: $82.50
• 8,001 lbs. and up: $96

Other fee increases include:

• Title changes: from $15 to $18
• Registration renewals: from $8 to $11

And that abandoned RV fee? It’s going from $6 to $8.

Luxury rides and high-end toys targeted

Got a luxury car habit? Might want to downshift.

Starting January 2026, Washington will impose:

• An 8% tax on vehicles priced over $100,000 (with the threshold increasing by 2% each year).
• A 10% tax on non-commercial aircraft worth more than $500,000.

Trade-ins won’t help you dodge this tax.

Revenue from these luxury taxes will be funneled into the Multimodal Transportation Account, and for aircraft, the Sustainable Aviation Fuel Account, though some details still depend on other pending legislation.

Rental car sales tax jumps from 5.9% to 11.9% in 2026, then drops to 9.9% in 2027

The same applies to peer-to-peer car rentals like Turo—not just traditional companies

And don’t forget: a new $1-per-tire fee is coming on retail sales of new vehicle tires. Retailers can keep 10% to cover their costs for tire disposal. The rest goes to the Department of Revenue, which may allocate it to the Department of Ecology for cleaning up illegal tire piles.

Ferries, tolls, and big events—oh my

Washington State Ferries are getting a financial boost. Starting this October, they would tack on a 50-cent capital vessel surcharge, with more increases (10 cents) in 2027 and 2029.

Also, a 3% surcharge will be added to all ferry credit card transactions.

Tolling changes? Say goodbye to the free ride on SR 520’s on- and off-ramps—they’re all going to be tolled.

Stadiums and event venues are getting pulled into this, too. Events at arenas with 17,000+ seats will face a $1-per-head transportation fee starting in 2026. The Senate had proposed a 20,000-seat threshold, which would have spared Climate Pledge Arena—but not anymore.

Cameras, permits, and carbon cuts

Speeding through a work zone? Starting July 2026, it’ll cost you $125, thanks to new automated camera enforcement.

Driver’s license and ID fees are rising, too. From October 1, 2026, an eight-year license goes from $72 to $80, with inflation-based increases each year after that.

In a twist, the House version repeals some climate-focused transportation accounts—but boosts programs like bicycle safety grants and Shared Street projects.

And creates the Sandy Williams Connecting Communities Account, which funds safer walking, biking, and rolling infrastructure in overburdened communities along highways.

And yes, there are even more fee increases sprinkled throughout the bill, not to mention changes to red light camera rules, pedestrian path expansions, and other non-financial transportation policies.

This bill is massive.

The bigger picture

Washington is trying to hold its crumbling transportation system together while pivoting toward a greener, more modern future. Lawmakers argue that these changes are crucial to meet the state’s infrastructure needs, climate goals, and evolving transportation demands.

Critics, though, are already warning that the bill will hit working-class residents the hardest, especially with gas prices and inflation already squeezing wallets.

It’s now up to the House Transportation Committee to approve the changes. If they do, the bill goes to a full House vote. and if approved, heads back to the Senate. If the Senate accepts all the rewrite done by the House, then it’s off to the governor’s desk.

But the reality is—with this many moving parts, it’s unlikely the Senate will rubber-stamp the House rewrite without changes.

And remember—there are just five days left in the session. If lawmakers can’t finish in time, the governor may need to call a special session to get it across the finish line.

Matt Markovich is the KIRO Newsradio political analyst. Follow him on X. Read more of his stories here.

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