WA State Legislation - Bills Passed in 2022

The 2022 WA State Legislature passed various bills relating to vehicle licensing.

ESSB 5974: Addressing transportation resources - Effective July 1, 2022

This bill includes an increase in the negotiable documentary service fee that dealers are allowed to charge and various changes to vehicle licensing & titling fees.

Negotiable Documentary Service Fee: The fee increases to $200.00 per vehicle sale or lease, up from $150.00. If you choose to charge this fee, you are still required to comply with proper disclosure of the fee including that the fee is negotiable.

Dealer Temporary Permits: The fee for temporary permits increases to $40.00, up from $15.00. You will still be credited the $5.00 when you replace your temps during title transfers.

License Plate Fees: The original plate fee increases to $50.00, up from $10.00 and the replacement plate fee increases to $30.00, up from $10.00. For motorcycles, the original plate fee increases to $20.00 and the replacement plate fee increases to $12.00.

For vehicles previously registered in any other state or country, there is a mandatory stolen vehicle check fee. This fee will increase to $50.00, up from $15.00. The fee will again increase to $75.00 starting on 7/1/2026.

We encourage all dealers to check with their local DOL subagent who processes their title transfers for a breakdown of fees charged for licensing, registration, and titling.

For more information on this bill, visit ESSB 5974.

SHB 1984: Protecting privacy of addresses related to vehicle registration certificates - Effective January 1, 2023

This bill requires printed-paper registration certificates for vehicles, trailers, and vessels to be printed on paper that allows for the manual removal of a registrant's address, by the named registered owner.

For more information on this bill, visit SHB 1984.

SHB 1790: The creation, display, and material durability of temporary license plates - Effective July 1, 2023

This bill replaces temporary permits with temporary license plates, made of durable material, and displayed in the same manner as a permanent license plate.

This includes the dealer temporary permit that is issued to a buyer during a vehicle sale.

For more information on this bill, visit SHB 1790.

DOR Excise Tax Advisory on Retail Sales & Use Tax on Goodwill Vehicle Repairs

The Department of Revenue issued an Excise Tax Authority (ETA) for guidance on how Washington's retail sales & use tax laws apply to "goodwill repairs" that are performed by dealers.

The Department of Revenue defines goodwill repairs to mean "repairs or services performed on a vehicle by a dealer or manufacturer when those repairs or services are not covered by any warranty." Usually these types of repairs often have no contractual obligation and are authorized at the sole discretion of the dealer or manufacturer and the repair is free of charge.

When a goodwill repair is done on a vehicle, the customer does not owe retail sales tax on the repair because there is no sale being made to the customer since the repair is being made free of charge; however, there may be retail sales or use tax due by the dealer or manufacturer.

If a dealer provides a goodwill repair to a customer's vehicle, there is no retail sales tax due by the customer but the dealer does owe use tax on the value of the parts used to perform the repair if those parts were purchased with a reseller permit and no sales tax was paid by the dealer at the time of purchase for those parts. However, no use tax is due on labor the dealer provides to make the repair.

We reached out to the Department of Revenue for clarification on how this ETA applies in the situation where, as part of the condition of a retail vehicle sale, an independent motor vehicle dealer promises to make a repair on the vehicle a purchaser is buying from the dealer, and the promise to repair is done on the Due Bill form at time of vehicle purchase and, as negotiated at the time of vehicle purchase, the repair will be performed at a later date after the vehicle purchase and will be free of charge.

The Department of Revenue's response: Since the 'Due Bill' for repairs was negotiated at the time of sale as a condition of the sale, the parts the dealer pulled from their inventory in this situation are not subject to use tax. The fact that the repair is actually done at a later date, does not affect this. However, if the repairs were negotiated independently from the purchase of the vehicle, then the dealer would be subject to use tax on the parts pulled from their inventory.

The ETA also gives guidance to dealers when the goodwill repair is authorized by the manufacturer and completed by the dealer. The dealer may have obligations for collecting or owing retail sales or use tax in these situations.

The response we received from the Department of Revenue is not binding to any one specific dealer. If you would like a binding tax ruling on this specific situation for your dealership or if you would like a binding tax ruling on any question or issue you may have, visit Request a Tax Ruling.

For more information about this ETA, please visit Department of Revenue's ETA 3228.2021 Retail Sales and Use Tax on Goodwill Vehicle Repairs.

L&I's Continued Requirements for Employers for COVID-19

Our state's mask mandate has been lifted for most workers, but Labor & Industries still sees COVID-19 as a public health emergency and a recognized workplace hazard.

Pursuant to L&I, employers are required to maintain a safe workplace and must continue to do the following:

  • Keep workers known or suspected to have COVID-19 from working around others by following appropriate isolation or quarantine guidance as outlined by the Washington State Department of Health.
  • Provide hand washing facilities and supplies, and regularly clean and sanitize surfaces.
  • Educate workers about COVID-19 prevention in the language they understand best.
  • Report COVID-19 outbreaks to L&I within one business day when they involve 10 or more workers at a workplace or job site with more than 50 workers.
  • Address COVID-19 notification, reporting, and prevention measures in the employer’s workplace-specific, written Accident Prevention Program or equivalent safety program.
  • Allow workers to voluntarily wear masks and personal protective equipment (PPE) as long as it doesn’t create a safety or security issue.

Also, employers should continue to monitor any COVID-19 hazards and adjust prevention measures when those hazards change.

For more information, visit L&I Requirements and Guidance for Preventing COVID-19.

WA State Legislature EHB 1049: Concerning Off-Site Vehicle Delivery & Retail Installment Contracts - Effective July 25, 2021

The Washington State Legislature passed EHB 1049, concerning the off-site delivery of a vehicle by a licensed motor vehicle dealer and modifies the established place of business and retail installment contract requirements.

Under EHB 1049:

  • Dealers are allowed to deliver vehicles for inspection, test drive, lease, or purchase and have customers sign agreements over the Internet or at a location other than the dealer’s established place of business or licensed or temporary subagency.
  • The consumer's right to timely cancel retail installment transactions is modified to exclude off-site transactions for the purchase of a motor vehicle along with the requirement to include a right-to-cancel notice with retail installment contract; however, when a dealer sells a vehicle through a retail installment contract at a place other than the dealer’s established place of business, the dealer must disclose to the purchaser or lessee in writing that there is no statutory right to cancel the contract.
The Department of Licensing issued guidance on the new regulation:

  • The new ability to conduct remote vehicle sales or delivery does not eliminate the requirements for an Established Place of Business and these must continue to be maintained.
  • If a sale or lease is conducted off site and a hard copy permit is issued, this information must be submitted into the E-permit system within 24 hours.
  • Auto dealers must ensure their bond coverage is adequate for remote sales, leases, or transactions outside of their established place of business.

The new regulation is effective on July 25, 2021.

For more information, visit EHB 1049 Final Bill Report.

Alert from NIADA - PPP Loan Recipients' Information Made Public

The Small Business Administration was required to release public data on all businesses that received loans through the Paycheck Protection Program. The information that was released, including borrower's names, addresses, loan amounts, and lender information was in response to a court order from a Freedom of Information Act lawsuit that was filed by the Center for Public Integrity and 10 other organizations challenging the SBA’s refusal to release records on borrowers and their loan information.

Now third-party businesses can use the disclosed information to target PPP loan recipients with deceptive marketing materials and fraudulent claims. NIADA is urging all businesses who received PPP loans to be aware of any third-party marketing in reference to your PPP loan that may imply an affiliation with the PPP loan program, the Small Business Administration, or your PPP loan lender. NIADA suggests you should check with your lender or the SBA to confirm any claims being made.