Transport for Seattle’s transportation department wants to charge an auto tax on all vehicles, but it will likely face fierce opposition from city councilmembers who fear the proposal would discourage new cars from being built.
In an ordinance filed late Tuesday, the Seattle Public Utilities Commission proposed raising a 3.75 percent sales tax on new and used vehicles and a 2 percent fee on commercial and industrial vehicles, plus a 0.75-percent vehicle-per-metric-mile tax.
The proposed taxes would be applied to the vehicles of businesses that employ more than 10 people, as well as to owners and operators of commercial vehicles.
If passed, the new taxes would go into effect July 1.
The ordinance also would require the city to provide annual information on the tax rate, with a specific percentage at the top of each section, to help consumers determine which taxes are most appropriate.
The commission’s proposals follow other cities and states around the country that have recently levied vehicle-tax hikes, including the New York City Council, New Jersey’s Assembly, Connecticut’s Senate, Illinois’ Senate, and Wisconsin’s Senate.
However, Seattle has so far refused to raise its own vehicle tax.
As a result, the city will likely be forced to raise a different amount than most of its neighbors, such as Portland, Oregon, and San Francisco, California, said Paul Fruin, a transportation economist at the University of Washington.
Seattle has already raised its property-tax rate twice since 2000, but the commission’s proposal could make that number even higher.
Frui said the commission could also increase the sales tax by 0.5 percentage points to help fund its transportation department, and to help pay for other projects, such to provide street lights or to repair street trees.
But some residents of Seattle, including councilmember Sally Bagshaw, who is leading the effort, fear the proposed tax would discourage people from purchasing new cars and that the new tax would be more regressive.
“If we had a vehicle tax, it’s going to be less and less appealing,” said Bagshaw.
“People don’t want to spend $10,000 on a car and buy a $30,000 vehicle.”
The councilmember said the city could also be able to create a special tax for people who want to buy new cars in certain circumstances, such a for those who work part-time and have other income.
The city also could tax used cars more heavily, to discourage them from being bought.
But even with the new fees, Seattle is not expected to be a particularly wealthy city by 2023.
The most wealthy people in the state will be paying the most, according to the most recent figures from the American Community Survey, and they make up nearly 50 percent of the residents of the city.
“We have a large population, and we have a high number of residents who are earning a lot of money,” said Seattle Mayor Mike McGinn, a Democrat.
“I think we should be able just to have a conversation with them and say, ‘We want you to pay a higher percentage.
McGinn has said that he is considering a tax increase on new cars, including a 5 percent tax on used cars. “
Seattle has not yet raised a vehicle-license fee.
McGinn has said that he is considering a tax increase on new cars, including a 5 percent tax on used cars.
“It is not going to get me elected.””
There are ways to lower the tax, there are ways we can lower the cost,” McGinn said.
“It is not going to get me elected.”