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 Tax Credit
Businesses are eligible to receive tax credits for purchasing new alternative fuel commercial vehicles. Qualified commercial vehicles must be powered primarily by natural gas, propane, hydrogen, dimethyl ether, or electricity. Tax credit amounts vary based on gross vehicle weight rating (GVWR) and are up to 50% of the incremental cost, with maximum credit values as follows:
|GVWR||January 1, 2016 to December 31, 2017||January 1, 2018 to January 1, 2021|
|Up to 14,000 pounds (lbs.)||$5,000||$25,000|
|14,001 to 26,500 lbs.||$10,000||$50,000|
|Over 26,500 lbs.||$20,000||$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. The converted vehicle must be less than two years old and have an odometer reading of fewer than 30,000 miles. Beginning January 1, 2018, eligible converted vehicles must be less than ten years old and have an odometer reading of fewer than 450,000 miles.
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 per weight class.
(Reference Revised Code of Washington 82.16.0496)
Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Emissions Inspection Exemption
Dedicated electric, natural gas, and propane vehicles are exempt from state emissions control inspections. HEVs 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
Natural gas used as a transportation fuel is 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 82.16.130)
Laws and Regulations
Alternative Fuel Vehicle (AFV) 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.
The Washington State Department of Transportation (WSDOT) convened a work group and submitted recommendations to the legislature on an annual license fee that more closely represents the average fuel consumption of vehicles by weight. The work group also developed a transition plan to move more NGVs from the license fee to the fuel tax under Revised Code of Washington 82.38.030. The transition plan incorporates stakeholder feedback and includes draft legislation and cost and revenue estimates. The work group includes representatives from WSDOT, the trucking industry, NGV manufacturers, and other stakeholders. For more information, see WDOT's Annual License Fee in Lieu of Fuel Tax and Natural Gas Recommendations reports.
(Reference Revised Code of Washington 82.32.900 and 82.38.075)
Alternative Fuel Vehicle (AFV) 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 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 miles per gallon (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 Fuel Sales Regulations
Public utility districts are authorized to sell renewable natural gas to facilities that condense or dispense natural gas for use as a motor fuel. Renewable natural gas is defined as methane gas or other hydrocarbons derived from organic materials. (Reference Revised Code of Washington 54.04.190)
More Laws and Incentives
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