Washington House passes e-bike sales tax exemption

Rep. Sharon Shewmake (D-Bellingham)

On Tuesday, by a 57 to 39 vote, the Washington House of Representatives passed HB 1330, exempting electric bikes and up to $200 in bike accessories from state sales taxes. In a tweet, Rep. Sharon Shewmake (D-Bellingham), who introduced the bill, called it a “bipartisan bill that will be good for the climate”. 9 House Republicans voted for the bill, the exact number of Democrats that voted against it.

Rep. Alex Ramel (D-San Juans) framed the bill in committee as a pilot that will show whether sales tax incentives can increase e-bike sales in Washington. The exemption would expire on May 1 2027 or when $500,000 in sales tax revenues have been forgone under the program. Long time Seattle Bike Blog readers may be surprised to see Rep. Ed Orcutt (R-Kalama) voting to exempt e-bikes from sales taxes here.

The bill still has to get through the State Senate. Both the Senate Transportation Committee’s Chair, Steve Hobbs (D-Lake Stevens) and its ranking member Curtis King (R-Yakima) have proposed increasing the sales taxes on sales of new bicycles of all kinds, a largely symbolic gesture to make a transportation package appear to be balancing revenue sources from all transportation modes. Presumably those members won’t vote to also exempt e-bikes from sales taxes; it’s unclear what happens if both were to pass.

If this were to go into effect, it should only fuel the massive appetite to purchase bikes that continues into 2021. Today the Seattle Times quoted Gregg’s Cycles’ Marty Pluth: “Every bike that comes in is sold right away, so we never get to a point where we refill the tank.” But the sales tax exemption also brings some parity, with Washington already offering a sales tax exemption on the sales of electric vehicles. Since 2019, a sales tax exemption has been available on the first $25,000 on a new electric or hybrid vehicle and the first $16,000 of a used one.

On the Federal level, there’s momentum for incentives like this as well, with Portland’s Rep. Earl Blumenauer sponsoring a bill with Rep. Jimmy Panetta to introduce the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act, which would create a tax credit that covers 30% of the cost of an electric bike, up to $1,500. Lawmakers clearly see e-bikes as something they can work to promote. Even if this bill doesn’t make it through the State Senate this session, that momentum is not likely to go away.

About Ryan Packer

Ryan Packer is Temporary Editor of Seattle Bike Blog.
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12 Responses to Washington House passes e-bike sales tax exemption

  1. Tim says:

    Since 2019, a sales tax exemption has been available on the first $25,000 on a new electric or hybrid vehicle and the first $16,000 of a used one.

    What’s the source on this? Pretty sure hybrids don’t qualify for tax exemptions…

  2. William says:

    Does the sales tax apply to regular bikes? It’s frustrating enough as I’m struggling uphill under my own power to be overtaken by them as is, so I not sure how I would feel if I knew they were getting a tax break I’m not?

    • Richard says:

      Carrots and sticks. Yes, regular bikes would benefit too, but an ebike is much more attractive for someone that is used to their SUV where they only have to move their arms and ankles

      • Kim K says:

        William and Richard: I converted my bike to e-assist over a year ago not because I want to pass people going uphill, or because I drive an SUV, but because I am increasingly unable to ride up Seattle’s hills, and even riding down to my then-office job and putting my bike on the bus to get uphill was not tenable for me because I have lower back problems and not a lot of upper body strength. Many if not most are e-assist, which means that you still pedal, which means you still get some exercise. I started riding my bike home from that job at the end of the day instead of putting it on the bus, and I didn’t use the e-assist function except for the biggest hills, which means the e-bike gave me more exercise, not less or none.

        The e-bike also has allowed me to continue doing bike overnights and longer bike trips, which, because I can’t drive and can’t afford a car, are the main way I am able to take vacations outside of the city.

        All of the e-bike riders I know are like me – cyclists seeking to continue riding bikes for transportation, but needing something that e-bikes offer. In many cases, that’s being able to take their young child with them, or arrive to work in business casual without breaking a sweat. In some cases, their vision no longer allows them to drive safely, and an e-bike allows them to maintain a good amount of mobility and independence.

        Finally, and what I am pretty sure is some of the basis behind this bill, there’s good evidence that shifting trips from driving to e-bike.is a good way to take a chunk out of greenhouse gas emissions in the near future. This tax exemption is probably not enough of a carrot to get someone out of an SUV, but is likely to get someone thinking about trying an e-bike but concerned about price to try it. And if they try the e-bike, there is a good chance they will use their car a lot less. That is good for every single person and represents a remarkably valuable return on the investment of forgoing sales tax.

        Re greenhouse gas reductions: “A 2019 study from the Transportation Research and Education Center found that if electric bicycle usage increased by 15% across the U.S., we could reduce an estimated 11% of transportation-related CO2 emissions. The authors found that of every 100 utilitarian miles traveled by electric bicycle (trips made for purposes other than recreation or exercise), 72.4 of those miles would have been traveled by car. In other words, electric bicycles replaced 72.4% of car miles that would have been taken for strictly practical purposes” In: https://www.peopleforbikes.org/news/electric-bicycles-can-play-a-big-role-in-combating-climate-change

    • Tee says:

      This bill excludes regular bikes. The tax break is only for motorized bikes.

      https://twitter.com/drshewmake/status/1369418056498352135?s=21

  3. Ballard Biker says:

    When those rich, entitled assholes fly by me at 30 mph on their illegal motorized bicycles, it’ll be good to know they also got a sweet tax cut, likely in the hundreds of dollars…for the environment or something.

    • Kim K says:

      Yes, a few people do this. Just like a handful of people will flout anything. Better 30 mph on an illegal ebike (which, no, I don’t condone) than a legal but much more lethal SUV.

      And FWIW, many a time I’ve been passed close and way too fast by analog bike riders, including those going well over 20 mph, which is pretty intimidating and crappy when you’re just riding the Burke or some other trail.

  4. NoSpin says:

    Gregg’s Cycles’ Marty Pluth: “Every bike that comes in is sold right away, so we never get to a point where we refill the tank.”

    If bike sales are so strong, how is a tax exemption an incentive?

    WA’s tax code is riddled with exemptions for every-other little thing, and usually for the most dubious of rationales.

    Only ‘necessities of life’ – food, medicine, the median cost of housing – should have tax exemptions. Everything else: if you can afford to buy it, you can afford to pay the tax on it.

    • William says:

      I’m all for e-bikes, but if this passes then the tax break will go disproportionately to privileged Caucasian people who could easily afford to pay the tax. How on Earth is this good policy?

      • Tee says:

        I agree & would support this bill if it was inclusive of human powered bikes as well. It still needs to pass the Senate, so writing WA Senators & telling them this can spread that message. It’s also terrible that the tax break for safety and anti-theft equipment only goes to electric bicycle riders.

      • Kim K says:

        Because it gets people out of their cars, which is a net win for the climate, which is a net win even for those who don’t get an e-bike. It also helps signal demand and promote e-bikes as more and more people use them.

        Please also don’t assert that the tax break will only go to rich or white people. I’m definitely not affluent and I added an e-assist for reasons noted above. It saved me money on transit and if not for COVID would have paid for itself in about two years. I can’t afford a car, but I can afford an e-assist. Even very fancy e-bikes are often less than the cost of a used car, with much lower maintenance costs over time.

        There’s no reason why this can’t be used to push for a tax exemption for standard bikes in the future, either. It doesn’t have to be either/or. It can be both.

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