Sound Transit 3 Car Tabs FAQ

Thank you for visiting my page for frequently asked questions relating to Sound Transit car tab fees.

Transit is very important for our region, and in order to maintain public confidence in current and future transit developments, taxpayers need to know that they are being taxed on the accurate value of their cars. We’re working hard to make sure everyone in the Sound Transit service area is not being overcharged on their ST3 car tabs — and that we are keeping all transit projects on track and on-time.

I introduced HB 2123, as a solution to fix the mistake the Legislature caused in 2015 when it authorized Sound Transit to utilize an outdated and inflated car valuation method. HB 2123 does the following:

  • Makes sure that car owners are taxed on the most accurate value of their vehicle in law.
  • Keeps light rail and bus rapid transit projects on track.
  • Creates light rail savings by reducing Sound Transit’s costs to lease government land for light rail development.
  • Uses these savings to “backfill” lost ST3 revenue.

 

Frequently Asked Questions

What’s the issue with the current car valuation system?
Why is Sound Transit using an older car valuation system?
How can we fix this problem?
Does this bill cut light rail or bus transit funding?
How much will I save with your proposal?
Why can’t we just use Kelley Blue Book?
How do I know what the difference will be when I pay my car tabs?
Are my taxes increased in any way under your bill?
Does the bill affect previous Sound Transit votes?
Didn’t the voters approve ST3 as is?
Why does the bill only need to reimburse until 2028?

 

What’s the issue with the current car valuation system?
Due to a legislative mistake, Sound Transit is overvaluing most vehicles. In 2015, the Legislature designated a 20-year-old car valuation system for Sound Transit 3 (ST3), not the current and accurate 2006 valuation that was already in law. The 1999 valuation system is unfair for overvaluing cars, leaving people overpaying on their car tab fees.

I believe the Legislature should require that taxpayers pay based on the most current and accurate car valuation schedule on the books – the 2006 car valuation schedule. HB 2123 fixes this mistake.

 

Why is Sound Transit using an older car valuation system?
That’s the system the Legislature authorized in 2015 when it passed the Transportation Package. Republicans and Democrats told Sound Transit to use the 1999 valuation schedule because that’s what Sound Transit had used for the 1990s Sound Move campaign.

I believe this was a legislative mistake, as the current 2006 schedule currently in law is a more accurate valuation that closer tracks with Kelley Blue Book and was available. HB 2123 fixes this.

 

How can we fix this problem?
My bill ensures that taxpayers are only paying ST3 taxes on the most current and accurate car valuation schedule. A 2006 schedule was created by a joint House-Senate Committee comprised of public and private financial experts who sought to create a schedule that was workable for long-term bonds, and also closely tracked with market values. This 2006 schedule that is implemented through HB 2123 was found by The Seattle Times to track with Kelley Blue Book values.

By using this updated car valuation system, taxpayers will pay ST3 car tab fees on the fair and accurate value of their car. Without the passage of HB 2123, taxpayers will have to pay $630 million more than they should be paying over the next decade.

 

Does this bill cut light rail or bus transit funding?
No. The bill expressly requires no cuts to light rail or bus transit projects. HB 2123 provides “backfill” by saving Sound Transit from purchase costs of certain government land adjacent to and over highways in the area. These savings have been initially estimated as replacing the overwhelming majority of lost revenue to Sound Transit that comes from using this correct car valuation. Any remaining cost-savings must come from other non-light rail or non-bus funding sources. The legislative process will allow for a more complete assessment of these current figures with all relevant governmental entities, and any need for further appropriate backfill, to ensure that transit projects are completed as scheduled. My colleagues and I are committed to keeping all voter-approved light rail and bus transit projects on track and on schedule.

 

How much will I save with the updated car valuation?
It depends on the market value of your car, whether it’s a car or a truck, and how old your car is. If your car is less than 12 years old or over 15 years old you will be saving money. No one will pay more under my bill’s revised system. For a few taxpayers (with cars between 12 and 15 years old) whose cars are currently undervalued under the 1999 schedule, the bill will ensure that you do not pay more under the 2006 schedule.

 

What challenges are there with using Kelley Blue Book?
Kelley Blue Book is generally accepted by the public as indicator of the market value of your car as a consumer. We should get as close to this market rate as possible. An analysis by The Seattle Times found that my bill’s use of the 2006 schedule closely tracks and in some cases values car below Kelley Blue Book estimates. The 2006 schedule also allows for standard annual depreciation, which is used by bond markets for the issuance of long-term bonds.

There is a need to keep implementation costs as low as possible. The goal of the bill is to return tax overpayments to taxpayers, not create new government administrative costs. It would be an expensive cost if each vehicle had to be individually assessed or if a new statewide Kelley Blue Book DOL computer system was created solely for purpose of issuing credits. Also, the same $630 million would be returned to taxpayers under the 2006 schedule or through a new Kelley Blue Book computer system. Reducing the cost to taxpayers and maximizing the overall return of dollars to taxpayers is the advantage of using the 2006 schedule, instead of inventing a new computer valuation process. We need to be returning money to taxpayers by creating a fairer valuation system, not costing taxpayers more through government inefficiency.

 

How do I know what the difference will be when I pay my car tabs?
As of January 1st, the vehicle owner will be charged the lesser of the old 1999 valuation system and the newer 2006 valuation system and will receive a lower vehicle tab in most cases. DOL will provide you an insert with your car tabs that provide a description of the market value adjustment program and how it affects taxpayers. Accordingly, going forward, taxpayers will begin paying ST3 taxes only on the most current and accurate value of their car possible.

 

Are my taxes increased in any way under your bill?
No. This bill returns $630 million back to taxpayers over the next decade. It does not raise property, sales, or any taxes.

 

Does your bill affect previous Sound Transit votes?
No. Only to the extent that a different valuation system is used does it modify Sound Transit 3. The bill does not relate to any public vote or tax other than the recent passage of Sound Transit 3. All previous revenue streams from prior Sound Transit votes have been previously bonded and those taxes are set to expire by 2028.

 

Didn’t the voters approve ST3 as is?
They did, and it’s not generally the role of a statewide legislature to second guess a region’s tax vote. However, I believe that the Legislature has an oversight role to make sure constituents are not paying a tax rate on an overvaluation of their cars. The Legislature created this issue in 2015 when it passed a Transportation Revenue Package that directed an outdated valuation system for ST3.

I believe the legislature now have a duty to correct this past legislative action. We need to make sure that the voters’ plan is executed for light rail and that it’s delivered on time and on budget using a fair taxation model. Government must maintain credibility that it only taxes the accurate property value, so the public has confidence that the approval of future school bonds, transit measures, and other taxes are based on accurate property values.

 

Why does the bill only need to reimburse until 2028?
In 2028, the old, inaccurate valuation schedule automatically stops being used when bond obligations for previous Sound Transit projects are completed, and the more accurate valuation schedule will be used for the purposes of bonding.