Alternative Fuel Vehicles
9:14 am
Wed January 29, 2014

Slow Uptake Of Electric Cars Prompts Calls To Extend Washington Tax Break

Originally published on Tue January 28, 2014 3:48 pm

The slow uptake of electric cars by Northwest drivers is prompting calls to extend a tax break in Washington state for new vehicles powered by alternative fuels.

A sales tax exemption is set to expire next year.

Washington and Oregon have been among the best sales markets in the country for plug-in cars. But still, the number of fully electric and other alternative fuel vehicles on the road remains a tiny fraction of total registrations.

Auto industry lobbyist Sandi Swarthout urged state lawmakers in Olympia to postpone the scheduled phase out of a sales tax exemption on new electric cars.

"The tax preference is necessary because study after study tells us that one of the major barriers to consumer adoption is the differential price," said Swarthout. "Your average alternative fuel vehicle is going to cost you $10,000 more than the conventional vehicle that is comparable."

It originally took effect in 2009 and was extended once already. One hybrid car owner testified that the Washington sales tax break has had long enough to work.

"I believe that the exemption that has existed for six years should have been sufficient to encourage and facilitate a transition to alternative fuel vehicles. It still has another year to go," said hybrid driver Steve Segall of Olympia.

Supportive legislators now propose to extend the incentive from 2015 to 2023. Since Oregon doesn't have a sales tax, it offers a state income tax credit for home charging or compressed natural gas fueling stations. That expires in 2017.

In Olympia, this sales tax break has bipartisan support. But some lawmakers expressed interest in applying the sales tax to luxury alternative fuel vehicles so that "the rich millionaire guy who drives a $100,000 Tesla" -- in the words of State Senator Michael Baumgartner --- doesn't get an unneeded subsidy.

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