Washington House gives final approval to renewable-energy tax overhaul, 86–9
The Washington House of Representatives voted 86–9 on March 11, 2026, to approve Engrossed Third Substitute House Bill 1960, a measure described as "encouraging renewable energy in Washington through tax policy and investment in local communities." The vote was on final passage as amended by the Senate, and with it the House concurred in the Senate's changes and completed the Legislature's action on the bill. Three members were excused. Governor Bob Ferguson signed the measure into law on April 1, 2026, as Chapter 260, Laws of 2026.
The bill reworks how large renewable-energy projects are taxed in Washington. It exempts from property tax the personal property of qualified renewable-energy facilities and battery electric storage systems that become operational on or after January 1, 2028, and instead authorizes a new state and local renewable-energy excise tax on those facilities. A qualified facility is a solar or wind facility large enough to generate at least 10 megawatts of power; facilities owned or operated by centrally assessed utilities are not included. The bill also repeals an earlier personal-property tax exemption for certain solar and wind facilities and its accompanying production excise tax, enacted in 2023.
Under the new rates, the state excise tax would be $969 per year per megawatt for solar and $1,200 per year per megawatt for wind, with counties allowed to impose local rates of $2,905 and $3,600 per megawatt, respectively. Battery storage would be taxed at $156 per megawatt (state) and $467 per megawatt (local). The state's share of the revenue is directed into a new Local Investment Distribution Account, with at least 75 percent intended for a grant program that returns money to counties and local taxing districts that host these projects. The bill also creates a capacity-grant program for federally recognized Indian tribes. It takes effect January 1, 2028.
The bill was sponsored by the House Finance Committee and originally sponsored by Representative Alex Ramel. It had cleared the House 74–15 in February before the Senate amended it and passed it 42–6 on March 5; the Senate's amendments included lowering the wind tax rates and adjusting opt-in rules. The House's March 11 vote on the amended version was the final legislative step.
Supporters told lawmakers in public testimony that renewable projects' personal property depreciates over time, shifting the tax burden onto other local taxpayers — a shift felt most acutely in smaller counties and rural school districts. They described the bill as the product of two years of stakeholder negotiation, intended to provide stability for both developers and local governments while applying only to systems operational on or after January 1, 2028, leaving existing systems unaffected.
Opponents, while largely agreeing with the problem the bill addresses, raised concerns that the new excise-tax rates could exceed what developers expect to pay in property taxes over a project's life, potentially raising the cost of renewable energy and flowing through to electricity customers' bills. Testifiers also objected to exempting centrally assessed utilities, arguing that doing so would put independent power producers at a competitive disadvantage, and urged that the rates be set to keep the change revenue-neutral.
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