State House passes bill that would offer car-tab credits

Hundreds of homeowners were forced to pay higher ST3 taxes, even though only part of their property is within the Sound Transit District. The state House has approved legislation that would close that loophole for good.

The Washington state House has approved a bill that would lower car-tab fees by providing taxpayers with a reimbursement or credit for some of the money they're being charged under Sound Transit 3.

Rep. Mike Pellicciotti, D-Federal Way, who sponsored House Bill 2201, says it would return about $780 million to taxpayers over the next decade.

His proposal is the latest legislative effort to address public outcry over increased car-tab fees. The higher car-tab taxes took effect after the passage of the $54 billion tax package known as Sound Transit 3, or ST3.

The ST3 tax increases will pay to expand mass transit in King, Pierce, and Snohomish Counties with a range of light rail, commuter rail, and bus connections.

But when car-tab bills reflecting the tax hike started arriving in mailboxes in January, a lot of drivers were left with sticker shock. In many cases, car-tab fees doubled or even tripled.

House Bill 2201 seeks to reduce the car-tab burden by requiring Sound Transit to establish a Market Value Adjustment Program. That program would provide taxpayers a credit equal to the difference between the MSRP-based formula Sound Transit currently uses to calculate car-tab fees and a more updated formula based on a car's fair market value.

Sound Transit would be required to pay the credit to taxpayers using non-bonded sources of revenue or savings from the delivery of projects.  The credit would be paid retroactively, meaning taxpayers who already paid the increased car-tab fees would get refunds.

For instance, the owner of a 2015 Toyota Prius would pay $164 in ST3 car-tab taxes under current law. Under Pellicciotti's proposal, that person's bill would drop to $113. That's a saving of $51.

Pellicciotti calls it a workable solution that would put money back in taxpayer's pockets without undermining Sound Transit funding and voter-approved projects.

He also says the bill got bipartisan support in the house, with every Republican within the Sound Transit District voting in favor of it.

Pellicciotti has said he hopes the bill would break the legislative stalemate over ST3 car valuations.   

Republicans in the Senate have already passed their own bill that seeks to relieve concerns over increased car-tab fees. But Democrats in the House are unlikely to approve the Senate version, because they say it would jeopardize the expanded light rail service that voters said yes to in November.

In return, Senate Republicans have said they can't support House Bill 2201. They feel it doesn't do enough to provide taxpayers real relief.

Pellicciotti's response to that?

"$780 million back to taxpayers isn't a small amount of money," he said.  

© 2017 KING-TV


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