Zero Emission Vehicle (ZEV) Credits Excise Tax

Beginning on January 1, 2026, an excise tax is imposed on original equipment manufacturers (OEMs) regulated under Washington State’s ZEV program that generate surplus ZEV credits above the applicable annual ZEV requirement. Sold credits are taxed at 2% and banked credits are taxed at 10%, with proceeds funding electric vehicle incentives and state climate initiatives starting in 2027. OEMs generating fewer than 25,000 ZEV credits per model year are exempt.