Voters who said yes to Initiative 976 may be keeping a close eye on the calendar wondering just when they’ll see a tax break.
State officials still aren’t sure.
“We don’t have a firm effective date yet,” said Christine Anthony, a spokeswoman for the Washington State Department of Licensing.
Much of I-976 — the measure to lower car-tab taxes approved in last week’s election — would take effect Dec. 5, according to the state. That’s the “earliest it would take effect,” Anthony said, but the department is still trying to sort out how it will implement the new law.
“There’s a lot of programming that goes into our computer system that can take some time to figure out,” Anthony said.
Staff are consulting other agencies, including the Attorney General’s office, Anthony said. The Attorney General’s office declined to comment, citing its attorney-client relationship with the Department of Licensing.
For drivers whose vehicle registrations expire before the measure takes effect, there’s no way to wait it out for cheaper tabs, Anthony said. “We just encourage everyone to pay their tabs when they’re due … When your registration is due, that’s the amount that’s due.”
Complicating matters is the initiative’s fine print and new legal challenges.
According to a state analysis, all but a few sections of I-976 would take effect Dec. 5, one month after the election.
That would lower state car-tab fees for many drivers to $30 and repeal city car-tab fees. In Seattle, for example, an $80 fee is added to vehicle-registration costs each year to fund road maintenance and bus service. The Department of Licensing told the city of Seattle it would stop collecting that fee when the initiative takes effect.
But any changes to the taxes drawing the most ire in the Puget Sound region are likely months away, if they take effect at all.
I-976 attempts to repeal Sound Transit car-tab taxes, which are calculated using a controversial formula that overvalues many vehicles and has angered some vehicle owners. Sound Transit uses the money from those taxes to fund light-rail construction and other transit projects, including by issuing bonds backed by those dollars.
The initiative instructs Sound Transit to change or retire any bonds it has issued that were set to be paid back with car-tab tax money. When that happens, sections of state law allowing Sound Transit to charge car-tab taxes would be repealed.
If that hasn’t happened by March 31, a separate section would take effect lowering the amount of car-tab taxes Sound Transit can charge from .8% to .2%. I-976 also requires car-tab taxes to be calculated using Kelley Blue Book, attempting to do away with the inflated formula.
Those reductions may not happen immediately, though.
In an explanatory statement about the initiative written before it passed, the state Attorney General’s office said that if the agency can’t alter its bonds, existing Sound Transit car-tab taxes would “remain unchanged” and the lower tax rate would apply to future taxes.
How or whether Sound Transit will attempt to comply with any of these instructions remains to be seen. The Sound Transit Board is set to discuss I-976 on Thursday.
I-976 also faces potential legal limbo.
Seattle, King County and other government agencies and organizations filed a lawsuit this week describing the initiative as a “poorly drafted hodgepodge that violates multiple provisions of the Constitution.” Eyman called the suit a “slap in the face.”
The groups bringing that case say they plan to ask a judge to halt the initiative while the lawsuit plays out, but it’s not clear how soon they may get an answer.