The 2018 legislative session began with key Democrat lawmakers vowing to implement tax relief for Puget Sound drivers paying a new motor vehicle excise tax (MVET) as part of the voter-approved Sound Transit 3 package passed in 2016, even as legislators and one auditor questioned the viability of a proposal currently under consideration.
It remains to be seen what kind of relief will actually work. A bill introduced last year providing tax credits or a refund for drivers was pulled from the House floor days into the 2018 session, while an alternative bill received a January 11 public hearing in the House Transportation Committee.
Although the contention over ST3’s MVET revolves around its use of a 1990s vehicle depreciation schedule to determine a car’s value, HB 2357 would leave that valuation system fully intact and instead enable drivers to set up semi-annual or quarterly payment plans for their MVET. However, this option would only be available to those whose MVET is greater than two hundred dollars. If passed, the bill would take effect three months after its passage.
The proposal’s primary sponsor is Rep. Kristine Reeves (D-30) and it is cosponsored by seven Democrats. She told panel members at the public hearing that “as a working mom and somebody that pays a lot of different bills, I realize there’s a lot of different challenges.”
“This is a voter-approved initiative,” she added. “Like other things we pay for in life…we have options about how we make those bills fit into our budget. In this particular case, there’s not a lot of options. What this bill is really about is giving families the option to fit this voter-approved initiative into their budget in a way that works best for them.”
Politically speaking, the proposal is light years away from legislation introduced last year by Senate Republican that would have had Sound Transit use Kelley Bluebook or another traditional vehicle valuation system. More radical bills would have permitted cities and local governments, as well as their voters, to nullify ST3 taxes. Although those bills got through the Senate, Democrat control of the chamber due to the election of Sen. Manka Dhingra (D-45) makes the future success of those bills highly unlikely.
Yet, HB 2357 may have problems more technical than political, including how to properly enforce car tab laws if drivers can get a tab without fully paying for one. It was an issue raised during the hearing by Reps. Ed Orcutt (R-20) and Mark Harmsworth (R-44).
“How are we going to do that?” Orcutt asked. “Now when you pay it for the year, you get a tab for the full year. If we continue to do that and we give someone a tab, are they going to pay the other? It’s going to look to any officer like that registration is still good even if they don’t make the other three payments.”
Reeves responded that the bill is tailored so that the amount owed by the driver to the state is paid first. If a driver did not pay the rest of the amount owed, the Department of Licensing would note it in records accessible by Washington State Patrol.
“It is not our intent to turn the Department of Licensing into a collection agency,” she added.
Harmsworth asked what would happen if a driver sets up a payment plan for a car, makes the first payment, but then sells the car and doesn’t finish the remaining payment.
Reeves replied: “I would leave it up to the subject-matter expertise of the Transportation Committee to determine what precedence has been set for that in the past. I am not a subject matter expert on penalties. Therefore, I leave it to your discretion…and I am open to any conversation in which you would like to engage on that front.”
Technical questions were also raised by Douglas County Auditor Thad Duvall, who said he had “concerns about how it’s implemented. The Department of Licensing system right now is not programmed to collect payments in a manner as called for in the bill. We believe it will take the department quite a few months to get that in place. We think it’s imperative that the implementation date of this bill be moved to July of 2019.”
The bill is scheduled for a January 17 executive session of the Transportation committee.