Natural Gas Laws and Incentives in Washington
The list below contains summaries of all Washington laws and incentives related to natural gas.
Alternative Fuel Commercial Vehicle and Fueling Infrastructure Tax Credit
Businesses are eligible to receive tax credits for purchasing new alternative fuel commercial vehicles and installing alternative fueling infrastructure. Eligible alternative fuels are natural gas, propane, hydrogen, dimethyl ether, and electricity. Tax credits for qualified alternative fueling infrastructure are for up to 50% of the cost to purchase and install the infrastructure. Commercial vehicle tax credit amounts vary based on gross vehicle weight rating (GVWR) and are up to 75% of the incremental cost, with maximum credit values as follows:
|GVWR||Maximum Credit Amount Per Vehicle|
|Up to 14,000 pounds (lbs.)||$25,000|
|14,001 to 26,500 lbs.||$50,000|
|Over 26,500 lbs.||$100,000|
This exemption also applies to qualified used vehicles modified with a U.S. Environmental Protection Agency-certified aftermarket conversion, as long as the vehicle is being sold for the first time after modification. Modified vehicles are eligible for credits equal to 30% of the commercial vehicle conversion cost, up to $25,000.
Each entity may claim up to $250,000 or credits for 25 vehicles per year. Credits may be earned between January 1, 2016, and January 1, 2021. All credits earned must be used in that calendar year or the subsequent year. Tax credits are available on a first-in-time basis and are subject to annual limits of $2 million for vehicle credits, and $6 million for infrastructure.
(Reference Revised Code of Washington 82.16.0496 and 82.04.4496)
Alternative Fuel Vehicle (AFV) Emissions Inspection Exemption
AFVs powered exclusively by electric, natural gas, and propane vehicles are exempt from state emissions control inspections. Plug-in hybrid electric vehicles that obtain a U.S. Environmental Protection Agency fuel economy rating of at least 50 miles per gallon during city driving are also exempt from these inspections. (Reference Revised Code of Washington 46.16A.060)
Natural Gas Tax Exemptions
Compressed, liquefied, and renewable natural gas used as a transportation fuel are exempt from public utility taxes. In addition, natural gas distribution businesses are eligible for an exemption for machinery and equipment used for the production of natural gas for transportation fuel. This exemption is available quarterly as a remittance. (Reference Revised Code of Washington 82.08.02565 and 82.16.310)
Retail Sales and Use Tax Exemption
The retail sales and state use tax of 6.5% does not apply to the sale or lease of new or used passenger vehicles, light-duty trucks, and medium-duty passenger vehicles that are exclusively powered by an alternative vehicle fuel or are capable of running solely on electricity for at least 30 miles. Eligible alternative fuels are natural gas, propane, hydrogen, and electricity. Vehicles must not have a selling price plus trade-in property value that exceeds $45,000 for new vehicles and $30,000 for used vehicles. The maximum eligible amount for used purchased or leased vehicles is $16,000. The maximum eligible amounts for new purchased or leased vehicles are as follows:
|Through July 31, 2021||$25,000|
|August 1, 2021 - July 31 2023||$20,000|
|August 1, 2023 - July 31 2025||$15,000|
For more information, see the Renewable Energy/Green Incentives section of Washington Department of Revenue's Incentives Programs website.
(Reference Revised Code of Washington 82.12.9999)
Laws and Regulations
Alternative Fuel Vehicle (AFV) Car Share Pilot Program
The Washington State Department of Transportation (WSDOT) will develop a pilot program to provide AFV use opportunities to underserved and low-income communities and to those without easy access to transportation corridors. (Reference Revised Code of Washington 47.04.355)
Alternative Fuel Vehicle (AFV) Technical Assistance and Education Program
The Washington State University (WSU) Energy Program must establish and administer a technical assistance and education program on the use of AFVs for public agencies, including state and local governments. For more information, visit the WSU Energy Program Green Transportation Program website. (Reference Revised Code of Washington 28B.30.903)
Alternative Fuel Vehicle Annual Fee
Owners of natural gas vehicles (NGVs) and propane powered vehicles are required to pay an annual license fee, based on gross vehicle weight rating (GVWR), instead of motor fuel excise taxes. The fee is calculated as follows:
|Less than 10,000 pounds (lbs.)||$45|
|10,001 - 18,000 lbs.||$80|
|18,001 - 28,000 lbs.||$110|
|28,001 - 36,000 lbs.||$150|
|More than 36,000 lbs.||$250|
To determine the actual annual license fee imposed per registration year, multiply the appropriate dollar amount given in the above schedule by the motor vehicle fuel tax rate in cents per gallon effective on July 1 of the preceding calendar year, and divide the resulting amount by $0.12. There is an additional $5 handling fee for each license issued.
(Reference Revised Code of Washington 82.38.075)
Alternative Fuel Vehicle Labeling Requirement
Every alternative fuel automobile, truck, motorcycle, motor home, or off-road vehicle must bear a reflective placard from the National Fire Protection Association indicating that the vehicle is powered by an alternative fuel. Alternative fuels include propane and natural gas. (Reference Revised Code of Washington 46.37.467)
Low Carbon Fuel and Fuel-Efficient Vehicle Acquisition Requirement
Washington state agencies must consider purchasing low carbon fuel vehicles or converting conventional vehicles to use low carbon fuels when financially comparable over the vehicle's useful life. Low carbon fuels include hydrogen, biomethane, electricity, or natural gas blends of at least 90%. State agencies must achieve an average fuel economy of 36 miles per gallon (mpg) for passenger vehicle fleets in motor pools and leased conventional vehicles. State agencies must also purchase low carbon fuel vehicles or, when purchasing new conventional vehicles, achieve an average fuel economy of 40 mpg for light-duty passenger vehicles and 27 mpg for light-duty vans and sport utility vehicles. When calculating average fuel economy, emergency response vehicles, passenger vans with a gross vehicle weight rating of 8,500 pounds or greater, off-road vehicles, low carbon fuel vehicles, and vehicles driven less than 2,000 miles per year are excluded. (Reference Revised Code of Washington 43.19.622)
Renewable Natural Gas and Renewable Hydrogen Fuel Sales Regulations
Public utility districts are authorized to sell renewable natural gas and renewable hydrogen to facilities that condense or dispense natural gas or renewable hydrogen for use as a motor fuel. Renewable natural gas is defined as methane gas or other hydrocarbons derived from organic materials. Renewable hydrogen is defined as hydrogen produced using renewable resources as the source of the hydrogen and the source for the energy input into the production process. (Reference Revised Code of Washington 54.04.190)
More Laws and Incentives
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