Passenger trucks that weigh more than 6,000 pounds are exempt from the entire 1.1 percent yearly car tab tax that helps fund Sound Transit light rail, Sounder commuter trains, and ST Express bus service.
Here’s a tip for drivers who want to save hundreds of dollars in Sound Transit car-tab taxes.
Buy a bigger pickup.
Passenger trucks that weigh more than 6,000 pounds are exempt from the entire 1.1 percent yearly tax that helps fund light rail, Sounder commuter trains, and ST Express bus service.
That weight standard was created long before voter-approved Sound Transit taxation began in 1997. It was apparently meant to protect small businesses from an old car-tab tax for highways. The same weight standard was extended to regional transit agencies in a 1990 state law.
Lawmakers repealed the state’s motor vehicle excise tax for highways in 2001, slashing it to a flat $30, in the political fallout from Tim Eyman’s winning Initiative 695. In the years since, voters, legislators and cities enacted new car-tab taxes and fees.
Meanwhile, crew cabs, large SUVs and other big pickups became popular for personal use, not just businesses.
Sound Transit’s car-tab tax rate was only 0.3 percent, or $30 per $10,000 of car value, for two decades, until the ST3 measure won last fall and added $80 per $10,000.
Drivers saw increases that sometimes reached hundreds of dollars — but not owners of large pickups, such as certain Chevy Silverado 2500, Dodge RAM 3500, Ford F-450, or GMC Sierra 2500 trucks.
State Senate Transportation Committee Chairman Curtis King, R-Yakima, immediately sensed a problem when asked about the quirk last week. It bothers him that some vehicle owners avoid a tax that others must pay. King said he’ll ask committee staff to research further.
“I think it’s something that needs to be looked at. That’s not a fair and equitable thing in my book,” said King.
In all, there are 31,692 passenger trucks in the three-county Sound Transit district that are heavy enough to avoid the tax, according to the Washington State Department of Licensing. That doesn’t include business-owned trucks registered as commercial, though some owners use their personal passenger trucks for work, said DOL spokeswoman Christine Anthony.
Commercial vehicles over 6,000 pounds are exempt from ST3 tax.
The median taxable value of the over-6000 pound personal pickups is $17,760 under a state depreciation formula that overvalues newer cars and trucks. The owner of a median pickup saves $195 this year.
The average over-6,000 lbs. pickup is valued at $11,084, which means a $122 savings.
If big pickups were paying the car-tab tax, Sound Transit would rake in roughly $6.2 million more, beyond its $232 million in regional car-tab taxes predicted next year.
It’s unlikely the agency will seek that income any time soon.
Sound Transit is already on the defensive in the Legislature, where opponents this fall claimed in hearings that transit officials sneaked an inflated car-value schedule past lawmakers and voters to collect more money for ST3. On the other hand, the GOP-controlled Senate itself rejected a bill to clear up the confusion in 2015.
Sound Transit will not be seeking any sort of tax on heavy pickups, said spokesman Geoff Patrick.
The transit agency didn’t write the 1990 bill, and doesn’t wish to be associated with it, Patrick said. “It’s a state policy issue, and we’ve not viewed it as our place to try to modify it,” he said.
None of the legislators from that time are still serving.
In federal tax law, pickups over 6,000 pounds qualify for business-related write-offs. Dodge Ram touts the IRS provision as a benefit for purchasers, saying “Let the tax code work as hard for you as our trucks and vans do.”
But the opportunity to skip Sound Transit taxes hasn’t been a hot topic among pickup buyers.
“We don’t hear that often at all. Maybe once every other year or so,” Jeremy Balzarini, general manager at Milam Mazda and Truck Country in Puyallup, said via email.
State Rep. Mark Harmsworth, R-Mill Creek, learned in March his 2014 Ford F-350 pickup was exempt from the Sound Transit tax, even as constituents were complaining to him about car-tab sticker shock, The (Everett) Herald reported this spring. He expects a tax increase for older cars in his family.
If lawmakers were to tinker with new weight limits, that would create a hassle for landscapers or other people whose personal trucks do double duty, Harmsworth said last week.
“Sound Transit’s got enough money,” he said.
In a related issue, State Rep. Mike Pelliciotti, D-Federal Way, says he will refile his compromise bill to rebate $780 million to taxpayers over the next decade, to compensate for inflated values on all types of cars and trucks.
Pelliciotti said he’ll stay focused on the rebate legislation, which passed the House in 2017. He’s uninterested in opening yet another debate, about whether to tax heavy pickups.
“I’ve not heard from constituents looking to pay more in car tabs,” Pelliciotti said.