Chapter 82.96 RCW

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Battery electric storage systems" means commercially available technology that is capable of retaining electricity, storing the energy for a period of time, and delivering the electricity after storage by chemical, thermal, mechanical, or other means that has at least 10 megawatts of storage that is not subject to the provisions of chapter 84.12 RCW. "Battery electric storage systems" does not include any form of hydroelectric power. "Battery electric storage systems" does not include a system for which payments in lieu of taxes have been made under RCW 43.52.460.

(2) "Energy storage" means commercially available technology that is capable of retaining electricity, storing the energy for a period of time, and delivering the electricity after storage by chemical, thermal, mechanical, or other means.

(3) "Personal property" has the same meaning as in RCW 84.04.080.

(4) "Qualified renewable energy facility" means an electric generating facility powered by wind or solar energy with alternating current nameplate capacity of at least 10 megawatts that is not subject to the provisions of chapter 84.12 RCW. "Qualified renewable energy facility" does not include a facility for which payments in lieu of taxes have been made under RCW 43.52.460.

(5) "Renewable energy" means energy produced by a solar or wind facility with a nameplate capacity sufficient to generate at least 10 megawatts of alternating current power.

(6) "Renewable energy storage capacity" means the battery storage capacity per megawatt.

(7) "Repowered" means the cumulative rebuild or refurbishment of a majority, or more than half the nameplate capacity, of the qualified renewable energy facility or battery electric storage system due to the facility or system reaching the end of its useful life or useful reasonable economic life as determined by the county assessor. The rebuild or refurbishment does not constitute repowering if it is part of routine major maintenance or the maintenance of or replacement of equipment that does not materially affect the expected physical or economic life of the facility.

Effective date—2026 c 260: "This act takes effect January 1, 2028." [ 2026 c 260 s 307.]

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

(1)(a) For taxpayers granted an exemption under RCW 84.36.680, an excise tax is imposed on the privilege of using qualified renewable energy generating systems used as an electric power source in the state. The rate of the tax is as follows:

(i) $80 per month per megawatt of nameplate capacity of alternating current power for a qualified renewable energy generating system that uses solar energy to generate electricity and that was granted an exemption under RCW 84.36.680 for 10 years;

(ii) $75 per month per megawatt of nameplate capacity of alternating current power for a qualified renewable energy generating system that uses solar energy to generate electricity and that was granted an exemption under RCW 84.36.680 for 15 years;

(iii) $150 per month per megawatt of nameplate capacity of alternating current power for a qualified renewable energy generating system that uses wind energy to generate electricity and that was granted an exemption under RCW 84.36.680 for 10 years;

(iv) $130 per month per megawatt of nameplate capacity of alternating current power for a qualified renewable energy generating system that uses wind energy to generate electricity and that was granted an exemption under RCW 84.36.680 for 15 years.

(b) For taxpayers granted an exemption under RCW 84.36.680, a tax is imposed on the capacity of the renewable energy storage system of a qualified renewable energy generating system.

(i) The rate of the tax is $19 per month per megawatt hour of renewable energy storage capacity for exemptions granted under RCW 84.36.680 for 10 years.

(ii) The rate of the tax is $14 per month per megawatt hour of renewable energy storage capacity for exemptions granted under RCW 84.36.680 for 15 years.

(2) To ensure the rate structures reflect changes in technology, capacity, markets incentives, and inflation, the department may recommend to the legislature changes to the production excise tax rates in subsection (1) of this section to ensure a balance between the value of the exemptions granted pursuant to RCW 84.36.680 and the production excise tax rate imposed pursuant to this section. The goal is to optimize revenues for local communities while maintaining a rate and tax incentive program that is attractive to project developers.

(3) For taxpayers not assessed under chapter 84.12 RCW, the county assessor must provide a list of taxpayers granted an exemption under RCW 84.36.680 for the following year, along with any other information required, to the department by August 1st each year.

(4) A taxpayer applying for an exemption under RCW 84.36.680 for the following year must register with the department prior to submitting an application under RCW 84.36.680. If the application for an exemption under RCW 84.36.680 is granted for any calendar year, payment of the taxes imposed under this section are due.

(5) The taxpayer claiming an exemption under RCW 84.36.680 and paying the production excise tax under this section must file an annual attestation in the manner and form prescribed by the department.

(6) The definitions in this subsection apply throughout this section unless the context clearly indicates otherwise.

(a) "Qualified renewable energy generating system" means a set of devices whose primary purpose is to produce electricity by means of any combination of collecting, transferring, or converting renewable energy and that is receiving an exemption under RCW 84.36.680.

(b) "Renewable energy" means energy produced by a solar or wind facility with nameplate capacity sufficient to generate at least 10 megawatts of nameplate capacity of alternating current power.

(c) "Renewable energy storage capacity" means the battery storage capacity per megawatt hour.

(d) "Renewable energy storage system" means battery storage or battery energy storage system that can store renewable energy when production exceeds demand and release energy when energy demand increases.

Tax preference performance statement exemption—Automatic expiration date exemption—Application—2023 c 427: See notes following RCW 84.36.680.

(1) The renewable energy local benefit account is created in the state treasury. All receipts from the production excise tax in RCW 82.96.010 must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used for qualified local counties and qualified school districts.

(2) The total amount appropriated to qualified counties and the qualified school districts within those counties must be in proportion to the amount of production excise tax paid by renewable energy systems located in those counties and must be distributed as follows:

(a) Each qualified county must receive an appropriation equal to 42.5 percent of the production excise tax paid by a renewable energy system located in the county.

(b) Qualified federally recognized Indian tribes must receive an appropriation totaling 15 percent of the production excise tax paid by a renewable energy system impacting the tribes' resources or rights.

(c) Each qualified school district must receive an appropriation from the remaining 42.5 percent of the production excise tax paid by a renewable energy system located in the same county in proportion to the number of students being served by that district.

(3) For the purposes of this section, the definitions in this subsection apply unless the context clearly requires otherwise.

(a) "Qualified county" means a county that has a renewable energy system that receives a tax exemption under RCW 84.36.680 and pays the production excise tax under RCW 82.96.010.

(b) "Qualified federally recognized Indian tribe" means a federally recognized Indian tribe with rights or lands reserved or protected by federal treaty, statute, or executive order that are potentially impacted by a renewable energy system that receives a tax exemption under RCW 84.36.680 and pays the production excise tax under RCW 82.96.010.

(c) "Qualified school district" means a school district that is located in a county that has a renewable energy system that receives a tax exemption under RCW 84.36.680 and pays the production excise tax under RCW 82.96.010.

Tax preference performance statement exemption—Automatic expiration date exemption—Application—2023 c 427: See notes following RCW 84.36.680.

All of the provisions contained in chapter 82.32 RCW not inconsistent with the provisions of this chapter have full force and application with respect to taxes imposed under the provisions of this chapter.

Tax preference performance statement exemption—Automatic expiration date exemption—Application—2023 c 427: See notes following RCW 84.36.680.

(1)(a) Beginning January 1, 2028, a state renewable energy excise tax is imposed and collected on the privilege of using a qualified renewable energy facility for an electric power source in the state. This tax applies to qualified renewable energy facilities:

(i) That begin operation on or after January 1, 2028; or

(ii) For systems in operation prior to January 1, 2028, when one of the following occur:

(A) The repowering of a project; or

(B) The project developer opts into the renewable energy excise tax pursuant to RCW 82.96.060.

(b) Beginning January 1, 2028, a state renewable energy excise tax is imposed and collected on the privilege of using a battery electric storage system. This tax applies to battery electric storage systems:

(i) That begin operation on or after January 1, 2028; or

(ii) For systems in operation before January 1, 2028, when one of the following occur:

(A) The repowering of a project; or

(B) The project developer opts into the renewable energy excise tax pursuant to RCW 82.96.060.

(2) The taxes must be paid monthly in the manner and form prescribed by the department.

(3) The taxes imposed by this chapter are in addition to any taxes imposed upon the same persons under chapter 82.04 or 82.16 RCW.

(4) The moneys from this tax must be deposited into the local investment distribution account created in RCW 82.96.080.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: "RCW 82.32.805 and 82.32.808 do not apply to this act." [ 2026 c 260 s 303.]

Intent—2026 c 260: See note following RCW 43.63A.770.

Effective date—2026 c 260: See note following RCW 82.96.005.

(1) The rates of the state and local renewable energy excise taxes authorized in RCW 82.96.040 and 36.29.220 on qualified renewable energy facilities are as follows:

(a)(i) The state renewable energy excise tax rate is $968 per year per megawatt of nameplate capacity of alternating current power for a qualified renewable energy facility that uses solar energy to generate electricity.

(ii) The local renewable energy excise tax rate is $2,905 per year per megawatt of nameplate capacity of alternating current power for a qualified renewable energy facility that uses solar energy to generate electricity.

(b)(i) The state renewable excise tax rate is $1,200 per year per megawatt of nameplate capacity of alternating current power for a qualified renewable energy facility that uses wind energy to generate electricity.

(ii) The local renewable energy excise tax rate is $3,600 per year per megawatt of nameplate capacity of alternating current power for a qualified renewable energy facility that uses wind energy to generate electricity.

(2) The rates of the state and local renewable energy excise taxes authorized in RCW 82.96.040 and 36.29.220 on battery electric storage system are as follows:

(a) The state renewable energy excise tax is $156 per megawatt-hour of battery electric storage system capacity.

(b) The local renewable energy excise tax is $467 per megawatt-hour of battery electric storage system capacity.

(3) The rates in this section apply for the lifetime of the qualified renewable energy facility or the battery electric storage system or until the qualified renewable energy facility or the battery electric storage system repowers.

Joint legislative audit and review committee—Report—Intent—2026 c 260 s 105: "The joint legislative audit and review committee must review the tax rates contained in section 105 of this act and report to the legislature by October 31, 2031. The report must include:

(1) Estimates of what the taxpayer would have paid over the life cycle of the qualified renewable energy facilities and battery electric storage systems if the property remained subject to property taxes. The estimate must consider assumptions including the cost to construct, federal tax credits, trend factors, depreciation, and the average county tax rates across Washington;

(2) Comparisons to the qualified renewable energy facilities' and battery electric storage systems' economic and tax environments of other states;

(3) An analysis of the taxation of renewable energy related personal property owned by centrally assessed utility systems that are subject to the provisions of chapter 84.12 RCW and recommendations on how qualified renewable energy facilities and battery electric storage systems owned or operated by centrally assessed utilities can be transitioned into the renewable energy excise tax imposed pursuant to this act;

(4) An evaluation of any changes in the average per megawatt construction costs for different types of projects, the value of any federal or state tax incentives, the impact of technology improvements on the costs to construct projects, and any change in the annual project equipment depreciation guidelines compared to the previous five-year period; and

(5)(a) Recommendations, based on the findings, regarding future rate adjustments to ensure that taxpayers, the state, and local taxing districts are not disadvantaged by the renewable energy excise tax when new qualified renewable energy facilities and battery electric storage systems are subject to the renewable energy excise tax.

(b) The report must not recommend changes to the renewable energy excise tax rate for qualified renewable energy facilities and battery electric storage systems that are paying the taxes imposed by this act.

(c) The legislature intends that any future rate adjustments will be announced three years before the effective date of the rate change and that rate changes will not occur before January 1, 2034.

(6) The joint legislative audit and review committee shall collect data from the department of revenue, county assessors, and other relevant entities during the course of its review." [ 2026 c 260 s 108.]

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

Effective date—2026 c 260: See note following RCW 82.96.005.

(1)(a) A qualified renewable energy facility or a battery electric storage system that commences operation or repowers after July 1, 2026, but before January 1, 2028, may opt into the taxes imposed under RCW 82.96.040 and 36.29.220 and receive a property tax exemption under RCW 84.36.690 if:

(i) The qualified renewable energy facility or battery electric storage system provides to the legislative authority of the county in which the qualified renewable energy facility or battery electric storage system is located notice of its intent to opt into the taxes imposed under RCW 82.96.040 and 36.29.220 by September 1, 2026; and

(ii) The legislative authority of the county in which the qualified renewable energy facility or battery electric storage system is located has authorized the imposition of a local renewable energy excise tax before March 1, 2028.

(b)(i) If a qualified renewable energy facility or battery electric storage system opts into the taxes imposed under RCW 82.96.040 and 36.29.220 pursuant to this subsection (1), then the value of any personal property is exempt from property tax, as provided in RCW 84.36.690, beginning in the calendar year in which the taxes under RCW 82.96.040 and 36.29.220 are first imposed.

(ii) Local property taxes subject to the limitations of chapter 84.55 RCW must be reduced as necessary to prevent the exemption created in (b)(i) of this subsection (1) from resulting in a higher tax rate than would have occurred in the absence of the exemption.

(2) A qualified renewable energy facility or battery electric storage system that submitted a completed application under chapter 43.21C RCW as of November 2025, and commences operation after July 1, 2026, but before December 31, 2034, may opt into the taxes imposed under RCW 82.96.040 and 36.29.220 and receive a personal property tax exemption under RCW 84.36.690.

(a) To opt in, the qualified renewable energy facility or the battery electric storage system must notify the department and county assessor of its intent to opt in by April 30th. Notice must occur in the manner and form required by the department and the county assessor.

(b) The assessment of taxes under RCW 82.96.040 and 36.29.220 and the personal property tax exemption under RCW 84.36.690 apply January 1st of the immediately following calendar year.

(3)(a) A qualified renewable energy facility or battery electric storage system that does not meet the requirements of subsection (2) of this section, and that commences construction, becomes operational, or repowers after January 1, 2028, is subject to the personal property tax exemption in RCW 84.36.690 and the taxes imposed pursuant to RCW 82.96.040 and 36.29.220.

(b) The qualified renewable energy facility or the battery electric storage system must notify the department and county assessor at the time that the facility or system commences construction or repowers. Notice must occur in the manner and form required by the department and the county assessor.

(4)(a) A qualified renewable energy facility or a battery electric storage system which has been in operation for 25 years since the facility or system commenced operation or last repowered, may opt into the taxes imposed under RCW 82.96.040 and 36.29.220 and receive a personal property tax exemption under RCW 84.36.690.

(b) To opt in under this subsection (4), the qualified renewable energy facility or the battery electric storage system must notify the department and county assessor of its intent to opt in by April 30th. Notice must occur in the manner and form required by the department and the county assessor.

(c) The assessment of taxes under RCW 82.96.040 and 36.29.220 and the personal property tax exemption under RCW 84.36.690 apply January 1st of the immediately following calendar year.

(5) The personal property tax exemption in RCW 84.36.690 and the taxes imposed pursuant to RCW 82.96.040 and 36.29.220 automatically apply to a qualified renewable energy facility or a battery electric storage system after the facility or system has operated for 35 years or more, as determined by the county assessor, starting from the date on which the facility or system commenced operation or last repowered.

(6) The county assessor must determine if a qualified renewable energy facility or battery electric storage system meets the requirements of this section.

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

Effective date—2026 c 260: See note following RCW 82.96.005.

(1)(a) Subject to the conditions in (b) of this subsection, beginning January 1, 2031, the legislative authority of a county may impose a special local renewable energy excise tax if a qualified renewable energy facility or a battery electric storage system is located in:

(i) A local taxing district within the county that imposes an excess levy as authorized pursuant to RCW 84.52.052; or

(ii) A school district that imposes a levy as authorized pursuant to RCW 84.52.053 or 84.52.0531 after January 1, 2028.

(b) The legislative authority of a county may only impose the special local renewable energy excise tax in (a) of this subsection as follows:

(i) If the local taxing district levy is a new levy that was not previously part of the county property tax levy within the previous 10 years, the full value of the new levy may be used in the calculation of the excess levy increment in subsection (2) of this section; or

(ii) If the local taxing district levy or school district levy is a replacement levy for a levy that was part of the county property tax levy at the time of the passage of the replacement levy, or was part of the county property tax levy within the 10 years prior to the passage of the replacement levy, only the increase, if any, levy amount between the existing levy may be used in the calculation of the excess levy increment calculated in subsection (2) of this section.

(2)(a) The applicable local renewable energy excise tax rate established in RCW 82.96.050 must be multiplied by the excess levy increment as provided in this subsection to determine the special local renewable energy excise tax rate.

(b) The rate of the excess levy increment is calculated by dividing the sum of the applicable excess levy amount in dollars by the county and junior taxing district property levy amounts in dollars. This is the excess levy increment unless:

(i) The excess levy increment exceeds five percent and there is only a single excess levy, in which case five percent must be used in the calculation of the special local renewable energy excise tax under this section; or

(ii) Multiple taxing districts impose excess levies, in which case the excess levy increment for all the multiple taxing districts must be combined and may not exceed 10 percent in total.

(c) If a junior taxing district imposing an excess levy is located in more than one county, the calculation in (b) of this subsection must be adjusted by reducing the junior taxing district's regular and excess levies to reflect only the pro rata portion of the junior taxing district regular and excess levies that are located in the county imposing the special local renewable energy excise tax.

(3) The special local renewable energy excise tax rate may be adjusted annually to accommodate new and expiring excess levies and expires at the same time as the corresponding levy.

(4) The special local renewable energy excise tax must be paid at the same time as the local renewable energy excise tax imposed pursuant to RCW 36.29.220.

(5) The proceeds of the special local renewable energy excise tax must be distributed to the taxing districts that are imposing the excess levy. If there are multiple excess levies and the excess levy increment is capped pursuant to subsection (2)(b)(ii) of this section, the distributions must be as follows:

(a) For excess levies authorized at different times, the priority in distributions shall go in order of authorization from first to last; or

(b) For all other instances, the legislative authority of the county must determine the distribution of the special local renewable energy excise tax proceeds.

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

Effective date—2026 c 260: See note following RCW 82.96.005.

The local investment distribution account is created in the state treasury. All receipts from the state renewable energy excise tax imposed by RCW 82.96.040 must be deposited into the account. Expenditures from the account may be used for the local investment distributions contained in RCW 43.63A.770 and 43.63A.772.

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

Effective date—2026 c 260: See note following RCW 82.96.005.

All of the provisions contained in chapter 82.32 RCW not inconsistent with this chapter have full force and application with respect to taxes imposed under this chapter.

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

Effective date—2026 c 260: See note following RCW 82.96.005.

The department may adopt such rules in accordance with chapter 34.05 RCW, and prescribe such forms, as it deems necessary and appropriate to implement and administer this chapter.

Intent—2026 c 260: See note following RCW 43.63A.770.

Tax preference performance statement exemption—Automatic expiration date exemption—2026 c 260: See note following RCW 82.96.040.

Effective date—2026 c 260: See note following RCW 82.96.005.