Governor Ferguson Completes Executive Actions on 2025 Bills passed legislature -- Only $25 million in Operating Budget vetoes.

Yesterday, May 20, the 2025 legislative session officially ended as Governor Ferguson wrapped up post-session bill action. Speculation mounted as Governor Bob Ferguson contemplated budget and revenue legislation. Would Ferguson approve the operating budget in full? Issue selective vetoes? Or potentially prompt a special legislative session to revise critical components of the operating budget supported by new revenue? In the end, Ferguson’s vetoes were minimal, striking only about $25 million out of a $77.9 billion two-year spending plan. As for the revenue package, all the B&O tax increases, all sales tax increases on services, the tax increase on capital gains, electric vehicles and liquor all escaped any veto action. Ferguson restored one exemption used by community banks, explaining that it needed to be restored to address affordable housing.

At a press conference on Tuesday after taking final action on bills Governor Ferguson confirmed he had signed the state budgets and related revenue bills, issuing only limited partial vetoes, which can be found here by clicking on Signed/Partial Vetoes. Ferguson emphasized a “careful, line-by-line” review of the budget and acknowledged the difficulty of several decisions.

A key feature of the operating budget is a $1 billion increase in K-12 education funding, with a strong emphasis on special education. Though Washington has been facing a $16 billion projected shortfall, Ferguson noted that no state employees will be furloughed, despite his original recommendation, and all current cash benefit programs – including TANF and food assistance like SNAP – will remain unchanged. Ferguson noted the budget also maintains the state’s rainy day fund and allows flexibility to respond to potential future federal funding cuts. Washington state receives approximately 20% of budget revenue from the federal government.

Concerning the governor’s $25 million in operating budget vetoes, Ferguson described the process as “intentional and precise”. Notably, he strongly signaled the need for further refinements to revenue legislation over the interim – especially changes to the Business & Occupation (B&O) tax and tax on services – before the 2026 supplemental budget is signed next year. While he ruled out calling a special session for now, he acknowledged that ongoing discussions around revenue measures would continue and has instructed staff to begin reaching out to stakeholders. “We need to spend more time on these bills to avoid unintended consequences,” he said, suggesting more than just technical corrections are ahead.

On the Senate’s last-minute passage of a proposed wealth tax that would have removed the exemption for intangible assets, Ferguson expressed cautious openness to a “small, targeted” version. However, he noted the likelihood of legal and voter challenges and made clear he would not rely on it to balance the budget.

(Content provided by NYBA Lobbyist Jim Hedrick)

From NYBA Lobbyist, Jim Hedrick:

"The 2025 Washington State legislative session has been one of the most tumultuous and emotionally charged sessions in recent memory, marked by significant political tension, major fiscal challenges, and the deaths of two beloved legislators. From the opening days, the atmosphere was fraught with division. Deep ideological splits over how to address the state’s financial crisis created a highly charged environment where lawmakers frequently clashed not only along party lines but also within their own caucuses.

The session was further shaken by the death of former House Speaker Frank Chopp (D-Seattle). A towering figure in state politics for decades, Chopp's passing was mourned across party lines, with tributes highlighting his enduring legacy on affordable housing and social justice issues. Adding to the heavy mood, Senator Bill Ramos (D-Issaquah) passed away while in office a mere two weeks from the end of session. Other major family tragedies were Rep. Tom Dent’s (R-Moses Lakes) son was shot in a police action and the Saturday before adjournment, the wife of Sen. Chris Gildon (R-Puyallup) very unexpectedly passed away.

Operating Budget

The most pressing issue was the staggering $16 billion budget deficit. The reality of the shortfall quickly consumed legislative discussions, setting the tone for the months ahead. Proposed cuts sparked widespread protests and added to the strain inside the building. In response, a range of revenue ideas were volleyed around the Capitol, from new taxes on capital gains to expanded sales tax bases and proposals for bond measures.

The final 2025-27 operating budget, Senate Bill 5167, appropriates $77.87 billion an 8.2% increase or nearly $6 billion more thank the 2023-25 budget. This 1,366 page document moved through the legislature from conference committee report to final passage in less than 30 hours. This budget passed the House on a 52 to 45 vote having 6 House Democrats cross-over with all 39 House Republicans to oppose the bill. The state Senate passed the budget on a more comfortable 28 to 19 vote with moderate Democrat in a special election swing district race this fall, Sen. Deborah Krishnadasan (D-Gig Harbor), the lone Democrat to oppose the bill.

While the budget assumes significant savings, it does not reduce net spending. In fact, it increases spending by $1.039 billion above the maintenance level; the cost to continue current services after adjusting for caseload and inflation. The budget largely shifts funding from prior commitments to new priorities, including state and nonstate employee collective bargaining agreements. The budget does not assume furloughs of state employees and previous versions did. The proposed conference report leaves a projected ending balance for the 2025-27 biennium of $225 million NGF-O and $2.3 billion in total reserves, including $2.1 billion in the Budget Stabilization Account or Rainy Day Fund. Adequate budget reserves was an issue Governor Ferguson highlighted that he needed to see in a final budget.

The final $77.8 billion operating budget includes nearly $6 billion in cuts and close to $9 billion in new revenue over the four-year outlook — significantly less revenue than legislative

Democrats had initially sought. Governor Ferguson previously rejected each version of the revenue plan, citing concerns that the proposals were “too risky.” The final budget also steers clear of furloughs for state employees, an option both Governor Ferguson and Senate Democrats had floated earlier in the session. It remains unclear whether Governor Ferguson will support the budget in full or issue partial vetoes. His decision will be closely watched, as it could either cement cooperation with the legislative majority or trigger a new round of political negotiations in a special session.

Revenue

The revenue package passed by the legislature is expected to generate $9.379 billion. The legislature passed a suite of bills with increasing existing taxes, eliminating some tax loopholes and authorizing new taxes. Components of the revenue package include increases on the business and occupation (B&O) tax; the state’s “top-line” gross receipts tax.

§ HB 2081 (Fitzgibbon, D-Seattle) will increase B&O tax rates on manufacturing from 0.484 percent to 0.5 percent and retailing from 0.471 percent to 0.5 percent and the large “catch-all” category of business services jumps from 1.5 percent to 2.1 percent. B&O surcharge rates are increased from 1.2 percent to 1.5 percent for an additional tax on financial institutions. 2081 is expected to raise $5.6 billion over the next 4 years.

§ SB 5814 (Frame, D-Seattle) places retail sales tax to many services and especially in the tech sector, makes nicotine products subject to the tobacco products tax, imposes an additional tax on cigarettes and create a mandatory one-time prepayment of retail sales tax collections for businesses with $3 million or more in taxable retail sales in calendar year 2026. 5814 is estimated to bring in $2.6 billion over the next 4 years.

§ SB 5813 (Wilson, C., D-Federal Way) generating $680 million for the state in the next 4 years would apply an additional 2.9 percent excise tax on individual's Washington capital gains exceeding $1 million and increase the qualifying family-owned business interests deduction amount for the estate tax to $3 million with annual inflation adjustments.

§ SB 5794 (Salmon, D-Shoreline) repeals several tax preferences beginning January 1, 2026, including interest on real estate loans B&O tax deduction; insurance producers, title insurance agents, and surplus line brokers preferential B&O tax rate, precious metals and bullion B&O and sales and use tax exemptions, home energy assistance public utility tax (PUT) credit, dentistry prepayments insurance premiums tax exemption, international investment management services preferential B&O tax rate, international services B&O tax credit, and international banking facilities B&O tax exemption.

§ HB 2077 (Fitzgibbon, D-Seattle) or the “Tesla Tax” establishes a new tax on businesses producing products under the zero-emission vehicle program generating $281,000 over years.

§ SB 5786 (Stanford, D-Seattle) increases the fees by as much as 50 percent on various liquor licenses, permits, and endorsements. 5786, after being amended in the House, is expected to make roughly $5 million a year.

§ The Legislature was contemplating HB 2049 to increase the property tax levy from 1 percent to 1 percent plus the rate of inflation and population growth up to 3 percent for both state and local property tax levies. Those provisions were removed from the bill.

Transportation

The legislature found some common ground on the issue of funding transportation. SB 5161, (Liias, D-Mukilteo), the transportation budget bill was dedicated to Sen. Bill Ramos (D-Issaquah) who served as vice-chair of the Senate Transportation Committee and very unexpectedly passed away last week.

The new revenue transportation budget is $15.5 billion backed by a new 6-cent per gallon gas tax increase which will go into effect July 1. The additional tax rate is expected to raise $1.4 billion over the next six years. The diesel tax would net upward of $160 million over that time. In total, lawmakers are banking on the package to bring in $3.2 billion over the next six years. The revenue package received no Republican support in the House and five Republican votes in the Senate.

SB 5801, also by Liias, is on its way to Governor Ferguson for action and contains numerous other fee boosts for transportation. It is estimated SB 5801 will generate nearly $3.2 billion in revenue for transportation projects over the next 6 years. Among its numerous components is an increase in the passenger vehicle weight fee, an increase in the sales tax for vehicles from 0.3% to 0.5%. There are $3 increases in the fees for titles and registrations. There’s a new 8% tax on the portion of the selling price of vehicles above $100,000. There’s a 10% tax on non-commercial aircraft sales above $500,000 and an additional tax of 0.5 percent on the selling price, plus trade-in property of like kind, for purchased recreational watercraft. There’s also a temporary increase in the rental car tax from 5.9% to 11.9% before moving down to 9.9% in 2027. There’s an increase in the tire replacement fee from $1 to $5. There’s a $1 increase every three years in fees for new IDs and driver’s licenses. And there’s an added charge for ferry riders paying with credit cards, as well as a 50-cent increase to the capital vessel surcharge on each fare.

The proposed money will keep some of the state’s major highway projects on current schedules like the North Spokane Corridor, Puget Sound Gateway spanning King and Pierce counties and improvements on State Route 520 between Seattle and Redmond. $580 million is included for the new Interstate 5 Columbia River Bridge spanning Washington and Oregon. Lawmakers

also approved $2.5 billion to pay for the replacement. The bridge replacement will cost an estimated $5 billion to $7.5 billion. Permits are anticipated by 2026, and construction is projected to last until 2032.

Capital Budget ... the Bipartisan Budget

Senate Bill 5195 (Trudeau, D-Tacoma) is truly a bi-partisan budget being approved unanimously in both the House and Senate. The proposed compromise 2025-27 biennial capital budget makes major investments including $975 million for K-12 education, $827 million for natural resources, and $772 million for housing and homelessness. The budget also includes $375 million from the climate commitment account to support projects aligned with environmental and energy goals.

Governor’s Actions

During the 105-day (15 weeks) session, the Legislature passed over 400 bills; many along with the operating budget and revenue package now await action from Governor Ferguson, who has until May 20th to take action. The governor has 20 days (minus Sundays) from the end of the regular session to take action on bills passed by the 2025 Legislature.

Pursuant to the Washington State Constitution, the governor can take 1 of 4 actions on bills. The governor can sign a bill into law in its entirety, veto the entire bill, partially veto bills by eliminating entire sections of a policy bill or eliminate sub-sections of bills that contain an appropriation, or take no action by May 20th and the bill becomes law (no pocket veto like the U.S President). Only 3 bills in state history have become law by the governor taking no action.

NYBA Members, please see a recap from NYBA Lobbyist Jim Hedrick, on the status of SB5801, now that the State Legislature has adjourned for the year:

"The legislature adjourned Sunday, April 27, but not before passing SB 5801, the transportation revenue bill. The final version SB 5801 did NOT have a luxury boat tax. However, the legislature did pass an additional 0.5% sales and use tax on the selling price, including trade-in value, on all recreational vessels that are subject to the watercraft excise tax.

Senate Bill 5801 at section 201(4) page 20, lines 22-34 states:

(4)(a) Beginning April 1, 2026, in addition to taxes required under this chapter and chapters 82.12 and 82.49 RCW, there is levied and collected an additional tax of five-tenths of one percent on the selling price, plus trade-in property of like kind, for purchased recreational vessels. (b) In the case of a lease requiring periodic payments, the tax is imposed on the fair market value of the recreational vessel at the inception of the lease. (c) The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070. (d) For purposes of this subsection, "recreational vessel" means a vessel as defined in RCW 88.02.310* that is subject to watercraft excise tax under chapter 82.49 RCW. 

*"Vessel" means every watercraft used or capable of being used as a means of transportation on the water, other than a seaplane.

There is similar language at section 202 (6), page 23 lines 25-33 imposing the identical 0.5 percent “use” tax recreational vessels.   

Link to SB 5801 as Passed by the Legislature

Process: SB 5801 now goes to Governor Ferguson for action. Ferguson can sign the entire bill into law (likely), veto the entire bill (un-likely), or partial veto by striking entire sections (possible)."

We will update you if Governer Ferguson vetos the bill, or does a parital veto that would affect our industry.

We hope you have been able to catch up on where we currently stand with SB 5801 (see our prior email that was just sent out). 

In light of the information shared by Jim Hedrick, both in terms of where SB 5801 stands, and how our messaging has so far been received by the House Transportation committee, we are pressing forward with an updated call to action to our membership.

Call to Action BACKGROUND:

"At this point, we must operate under the assumption that the legislature will end on time AND that the luxury boat tax will remain as part of the final package. Below are members of the Senate Transportation Committee, where the luxury boat tax was added, I recommend making contacts with the Senate Transportation Committee (where the luxury boat tax was added) with the message points delivered to House members. The onslaught of calls to House Transformation members was effective; we need to remain vigilant." - Jim Hedrick, NYBA Lobbyist

Call to Action MESSAGE:

"This tax will dramatically effect working class people - boatbuilders, boatyard workers, boat detailers, mechanics, service facilities, boat brokers and the many unique small businesses that make up the vibrant Washington recreational boating community. While it may be 'aimed' at the wealthy, it will have a disproportionate affect on the working class recreational maritime community."

You are welcome and encouraged to share business-specific messages of how this will affect YOUR business directly. Concrete 'real life' scenarios have excellent impact. (See: Fluid Motion LLC letter, Pacific Maritime Title letter, Randy Cowley letter).

Call to Action CONTACTS AND PHONE NUMBERS:

Marko Liias (D) Chair: 360-786-7640

John Lovick (D) Vice Chair: 360-786-7686

Bill Ramos (D) Vice Chair 360-786-7608

Curtis King (R) Ranking Member 360-786-7626

Emily Alvarado (D) 360-786-7667 

Mike Chapman, Mike (D) 360-786-7646

Adrian Cortes, Adrian (D) 360-786-7634

Deborah Krishnadasan (D) 360-786-7650

Liz Lovelett (D) 360-786-7678

T'wina Nobles (D) 360-786-7654

Sharon Shewmake (D) 360-786-7682

Javier Valdez (D) 360-786-7690

Jeff Wilson (R) 360-786-7636

You can find additional information on the Senate Transportation Committee here, including mailing addresses and contact forms.

Respectfully,

Paul Groesbeck 
NYBA Board President
(425) 829-3551

Kevin Blake
NYBA Board Member - Chairman of Government Affairs
(360) 808-7120

As we wrapped up last week's Government Affairs work since the introduction of the Luxury Tax, we would like to send an update on where we are in the process.  A call to action email with instructions, contacts and messaging will follow this email shortly.

1.   Here is the latest from Jim Hedrick as of Saturday, April 5th:

"Earlier this week, Governor Ferguson laid out what he needs in a budget from the legislature. Essentially Ferguson said the legislature’s budget proposals depend too much new revenue and that the Wealth Tax (1% on financial assets of $50 million or more) probably would not withstand a court challenge and rejected it. Please understand, this is completely separate from the proposed luxury boat tax in the Senate Transportation budget and the provisions of SB 5801 remain intact and are still in play. SB 55801, passed by the Senate, is in the House Transportation Committee and at this time is still not scheduled for any action (i.e. public hearing).

Ferguson’s announcement essentially sends both the House and Senate back to the drawing board on their budgets; including the Senate Transportation which relies heavily on operating budget increases because of the sales tax diversion and general obligation bonding paid for with operating revenue.  The likely hood of the legislature finding additional budget reductions, additional revenue, and coming to an agreement prior to the constitutional end of the session on April 27 is dwindling. Special session is a very real possibility.

At this point, we must operate under the assumption that the legislature will end on time AND that the luxury boat tax will remain as part of the final package. Below are members of the Senate Transportation Committee, where the luxury boat tax was added, I recommend making contacts with the Senate Transportation Committee (where the luxury boat tax was added) with the message points delivered to House members. The onslaught of calls to House Transformation members was effective; we need to remain vigilant.” - Jim Hedrick, NYBA Lobbyist

YOU WILL RECEIVE AN EMAIL SHORTLY WITH THE SENATE TRANSPORTATION COMMITTEE CONTACT INFO AND SUGGESTED MESSAGING.  

2.    We want to thank all members who have reached out to us for providing letters, comments and supporting our membership with this awareness campaign.  This will take everyone in our Association as well as all of the others.  As we talk and strategize with other organizations across the country, we find an overwhelming sense of urgency as well as pride for our industry and its people.  While this drastically effects our brokerage industry, the impact is much larger on our great workforce of boatbuilders, boat yards, independent workers and so on. This is a jobs bill, pure and simple.  It affects everyone and we are very proud to have the powerful resources and commitment of the Northwest Yacht Brokers Association at our disposal.  

3.    There has been an overwhelming response to the "Wealth Tax" conversation that the Governor talked about last week (see above, in Jim's update). Please understand that the Wealth Tax is very different than the Luxury Tax. The Wealth tax will tax aggregated wealth, and the Luxury Tax will tax boats, RV's, airplanes, and cars.  These two are very different, which means the Luxury Tax is still a fight and we need to spread the awareness on how this effects our industry and its workers.  Call or email your representatives and make it clear your opposition on this Bill.  We do not want this attack on our industry ever again.  

4.    We sent out a survey/poll mid last week.  The response has been great!  Please take the time to complete the small survey as it helps us in our awareness for our Association.  If you have any difficulties or questions, please call the NYBA office as they are more than happy to help. We will be expanding this into next week due to some members having difficulties with their passwords or the email going into their SPAM folder. Poll is linked here. (you must login to vote, you can reset your password by clicking the "forgot password" link at the login screen)

5.    We have continued to move forward with our media partners.  Since the last update, more than 100 media outlets have been notified.  This list is too long to publish, so please, if you have a recommendation, reach out to us and we will contact them.  Further, there was a segment with Kevin on KVI 570 discussing the impact of the bill on our industry that went very well.  KVI is now wanting to focus on this further.  Also, Soundings Trade Only did an interview which should be seen shortly.  Lastly, our media strategist for the Boat Show is partnering with us to continue to add value to our awareness campaign.  

6.    Many of you asked about what the RV, Aircraft and Car industry is doing.  We are in the process of gaining those connections and contacts in which we would look to collaborate any ideas or partnerships. If anyone has a direct contact, please let us know as we would like to explore this avenue as well.  

To wrap up, our Lobbyist, Jim Hedrick, commended us on our efforts and indicated that the Northwest Yacht Brokers Association and its members are definitely being heard.  Jim indicated that we need to push the gas pedal to floor and keep the calls, letters and emails coming into the representatives. Please have everyone in your organization, friends, clients, family members and so on call, email and make your voice heard in opposition to this SB5810.  

Please find below letters from Fluid Motion LLC (the West Coast's largest fiberglass boat manufacturer) and Pacific Maritime Title, detailing their concerns regarding the impending luxury tax. These letters were sent to the House and Senate, sharing how the luxury tax will affect two very successful and growing businesses in the Northwest marine industry:

Fluid Motion LLC letter to Legislature (text copy)
Pacific Maritime Title letter to Legislature (official letter)

Please call us if you would like any other updates or have any questions or comments.  Not only are we available but all of our Board Members and Association Staff members are available.  Please do not hesitate to reach out.  

Paul Groesbeck 
NYBA Board President
(425) 829-3551

Kevin Blake
NYBA Board Member - Chairman of Government Affairs
(360) 808-7120

Dear Fellow NYBA Members,

As the chair of the Government Affairs Committee, it has been a busy 7 days since the news broke about the proposed Luxury Tax. Both Paul and I have been receiving an overwhelming response from our membership regarding the SB5801 - Luxury Tax.  As an association that works and advocates for you and the membership, we are taking ALL recommendations and comments with the utmost care, consideration and action.  The ideas and connections that have been put forth by all of you have been very heartfelt & meaningful, which reminds us of why we belong to the Northwest Yacht Brokers Association.

Since Monday's update, Governor Ferguson stated yesterday he will not sign either bill that includes wealth taxes. At this point, it is very unclear if that includes the luxury tax & we continue to seek clarification. With that said, this issue is very much alive and ongoing. Our association has reached out to many news publications, radio stations, social media platforms and other organizations to gain as much traction as possible.  I have personally been speaking with David Campbell, the current President of the British Columbia Yacht Brokers Association.  We have had great conversations about their current luxury tax and the devastating impact it has taken on their boating industry.  It has been a great advantage to strategize and exchange ideas with an organization whom is currently living through a disaster similar to what is being proposed on our State.  We continue to seek out collaborations and strategies collectively with other organizations daily.  Our Industry has a voice, and it is being heard!

This includes the following:

 PRINT/ONLINE PUBLICATIONS

• 48 North
• Pacific Yachting
• Soundings Trade Only
• Boating Industry Canada
• Powerboat
• Superyacht Times
• Boat Geeks
• Boat Test
• Boat International

 RADIO

• KVI 570
• KTTS 770

 ORGANIZATIONS/ASSOCIATIONS

• NFIB - National Federation of Independent Businesses
• Pat Heely of Viking Yachts - A big marine advocate and a strong following
• Mike Joyce of Hargrave Yachts - A large following in the Superyacht industry an a weekly newsletter
• NMTA - National Marine trade Association
• RBAW - Recreational Boating Association of Washington
• IYBA - International Yacht Brokers Association
• YBAA - Yacht Brokers Association of America
• BCYBA - British Columbia Yacht Brokers Association

SOCIAL MEDIA 

• NYBA Facebook 
• NYBA Instagram
• Newly formed NYBA Twitter/X

Furthermore, as another avenue to help our cause we have coordinated our efforts with Anacortes Marine Trades Committee, Northwest Marine Trade Association, Recreational Boating Association of Washington, Marine Retailers Association of Americas and National Marine Manufacturers of Canada in a joint letter opposing this bill with backing information.  It was a joint effort, and we feel that the coordinated efforts with all of the associations will push our message even further.  The letter can be read here: Combined Letter to Legislature

VERY IMPORTANT: NYBA sent out a survey/poll to our membership that specifically addresses this Luxury Tax Bill.  Please take this survey/poll, link here (must be logged in to respond) and answer as you wish.  We are hoping to have the survey completed by the end of the week. This information is confidential and will be used to further our voice as an association.  We are in communications with representatives and leaders that can make a difference, and this survey/poll will make us united in our fight.  

As this bill comes to head here in the near future, we all need to keep moving forward with efforts to raise awareness. Refer back to our original email and call the people that can make a difference, the transportation committee members. Use your business database and your social media platforms to help raise awareness as time is of the essence!

Lastly, we have received some very heartfelt stories about how the 1991 Luxury Tax personally injured our members' businesses & livelihood. The stories that Paul and I have been hearing are absolutely heartbreaking. Our fellow board member, Amy Ripley Thornton, cited the negative impact on Banana Belt Boats when her father was running the business, and it was devastating. Another story that really hits home for our brokerage industry is from the former VenWest Yachts. The link to the letter is below for your kind attention. We want to give a heartfelt thank you to Randy and Maureen Cowley for proving the letter as an effort to raise awareness of how these taxes can negatively impacted other businesses.  Please let this be motivation to us all to raise awareness to others of SB5801! 

Randy Cowley Yacht Consultants - Testimonial.pdf

 Please feel free to contact Paul, myself or any other NYBA Board Members with comments, suggestions or ideas.  We are here for you. 

Sincerely,

Paul Groesbeck 
NYBA Board President
(425) 829-3551

Kevin Blake
NYBA Board Member - Chairman of Government Affairs
(360) 808-7120

State Legislature Moving Fast on Adding "10% Luxury Tax" to Boat Sales Over $500,000

This past Thursday, the Washington State Senate introduced additional language, buried in an existing transportation bill (SB 5801), authorizing a 10 percent luxury vessel tax on new and used boat sales over $500,000, in addition to sales, use and watercraft excise tax. For example, if a boat is sold for $600,000 the luxury vessel tax will apply to the $100,000 exceeding the $500,000 threshold.  This bill is to tax what they deem as "the wealthy." In essence, however they are hurting the peripheral workers in the industry, such as detailers, mechanics, dock staff, boat yards, etc. Our Northwest Yacht Brokers Association lobbyist Jim Hedrick has a detailed explanation of this bill below. This vessel luxury tax language was added to the bill at the last minute - minimizing our ability to fight the details. The Senate has already passed the bill (30 yays - 18 nays) and the bill is reverting back to the House.  *** CALL TO ACTION: The House Transportation Committee will take this up on Monday, March 31 - Please call ASAP. * Call these key Transportation Budget members: Rep. Jake Fey (D-Tacoma), House Transportation Committee Chair: 360-786-7974 Rep. Julia Reed (D-Seattle), House Transportation Committee Vice Chair, 360-786-7814 (Julia is also chair the maritime caucus (House and Senate) and would be a key ally in budget negotiations.) Rep. Adam Bernbaum (D-Olympic Peninsula) 360-786-7916 Rep. Andrew Barkis (R-Olympia), long-time ranking member, House Transportation  360-786-7824 Rep. Sam Low (R-Snohomish), assistant ranking member, House Transportation 360-786-7967 * Message: "This tax will dramatically effect working class people - boatbuilders, boatyard workers, boat detailers, mechanics, service facilities, boat brokers and the many unique small businesses that make up the vibrant Washington recreational boating community. While it may be 'aimed' at the wealthy, it will have a disproportionate affect on the working class recreational maritime community." * Process: Call - Leave a Message - Repeat for all Key Transportation Members. *** Your help is vital in this last minute attempt to defeat this short-sighted action that will financially hurt many workers in our industry that they are not considering. Thank you for taking the time to make your voice heard. Sincerely, Paul Groesbeck NYBA Board President Kevin Blake NYBA Board Member - Chairman of Government Affairs

From NYBA Lobbyist, Jim Hedrick:

Thursday evening the Senate Transportation budget marked up their revenue bill, SB 5801, with the language below authorizing a luxury vessel tax, in addition to sales, use, and the watercraft excise tax upon new or previously owned recreational vessels with a selling price in excess of $500,000. (See Below)

SSB 5801 Section 217(2), page 21.
(2) In addition to taxes required under chapters 82.08, 82.12, and 82.49 RCW, there is levied and collected an additional 10 percent luxury vessel tax on the sale of a recreational vessel if: 
(a) The selling price of the recreational vessel exceeds $500,000; or 
(b) In the case of a lease requiring periodic payments, the fair market value of the recreational vessel exceeds $500,000 at the inception of the lease. 
(c) The additional tax imposed in this subsection only applies to the portion of the selling price in excess of $500,000, or in the case of a lease requiring periodic payments, the fair market value of the recreational vessel in excess of $500,000 at the inception of the lease. 
 
Link to SSB 5801:
https://lawfilesext.leg.wa.gov/biennium/2025-26/Pdf/Bills/Senate%20Bills/5801-S.pdf?q=20250328221446  

Context:
The legislature is facing a $1 billion transportation budget shortfall and is seeking new revenue this session including a 6-cent a gallon (Senate) and 9-cent a gallon (House) gas tax increase that in future years would be indexed and automatically increase linked to inflation (CPI). Among several other tax increase proposal there is a luxury car tax that is a part of the original Senate Transportation revenue package (SB5801) at 10% on sales of motor vehicles in excess of $100,000. The luxury boat tax is a surprise but mirrors the luxury car tax with the 10% rate and sales price threshold. This legislature has made a point this session to single out high grossing companies with a proposed Payroll Tax (Senate) and a new Wealth Tax (House and Senate) on high-wage earners. The luxury tax on motor vehicles, yachts, and recreational air craft all fit into this political narrative.  

Process
SSB 5801 will be put to a vote of the full Senate TODAY Saturday (3/29) along with the Senate Transportation budget bill, SB 5161. The House will take up their transportation budget bill on Monday (3/31) and put both the budget and revenue bills in dispute; this kicks off the conference committee and budget negotiations. Once there is agreement, if there’s an agreement,  on budget and taxes, they will vote to advance the transportation revenue bills.  The budget negotiations should take a week, probably 2 weeks but the time to make your position known is NOW. Due to the fact the luxury boat tax was added by a late amendment and after the public hearing process, NYBA will have NO OPPORTUNITY to testify and state your opposition and give lawmakers the rationale as to why the luxury tax will not work. The legislature is set to adjourn on April 27.
 
Politics
I think there is very little room to maneuver on this issue. Having said that, I would focus contacts on House legislators on the Transportation Committee. Below are targets for the budget negotiations AND a list of all the members on the committee.

Potential Messages:

• Washington boating industry has no tax incentives for buyers and is limited by lack of moorage space and an already unfavorable tax climate for vessel sales, please don’t make it worse.
• The negative impact luxury taxes does not fall on consumers who will delay purchasing a boat. The negative impact falls on boat brokers and other small businesses that will be hurt by the lack of boat sales. These small businesses provide people with great jobs and also invest in their communities. 
• Luxury tax on boats has failed in many other countries and states due to decreased sales, lost employment, and the artificial price cap it places on product to avoid the tax.  

Transportation Budget Targets:

• Rep. Jake Fey (D-Tacoma), House Transportation Committee Chair: 360-786-7974
• Rep. Julia Reed (D-Seattle), House Transportation Committee Vice Chair,
  360-786-7814 (Julia is also chair the maritime caucus (House and Senate) and would be a key ally in budget negotiations.)
• Rep. Adam Bernbaum (D-Olympic Peninsula) 360-786-7916
• Rep. Andrew Barkis (R-Olympia), long-time ranking member, House Transportation  360-786-7824
• Rep. Sam Low (R-Snohomish), assistant ranking member, House Transportation
  360-786-7967

Full list of Transportation Committee Members can be found here (click on the dropdown menu that says "Committee members and staff" for full contact list.

You can review lobbyist Jim Hedrick's coverage of Washington State's primary here. 

The Washington State Legislative adjourned for the year on March 7. Here are a few updates from Jim Hedrick, regarding the two marine-related bills, 1919 and 1906:

HB 1919 – Modifying the process by which a private moorage facility may sell an abandoned vessel for failure to pay moorage fees. 

Result: Passed Legislature

The Bill: Changes, from 90 days to 45 days, the amount of notice that a private moorage operator must provide to a vessel owner before a vessel may be sold for failure to pay moorage fees. Changes, from 60 days to 40 days, the timeline by which a lawsuit to challenge the validity of a private moorage facility's impoundment of a vessel must be commenced. 1919 passed both the House and Senate unanimously, Governor Inslee expected to sign into law next week.

HB 1906 – Changing the vessel length requirement in obtaining non-resident vessel permits, from max 200' to max 300'. 

Result: Died on Third Reading (Floor) Calendar. 

The Bill: Would have increased from 200 to 300 feet the allowable maximum length of certain non-resident vessels eligible for a non-resident vessel permit. Would have required a fee for a non-resident vessel permit for commercially-owned vessels between 201 and 300 feet of $100 per foot of vessel length, beginning May 1, 2025.

Analysis: 1906 was on the Senate floor calendar for a final floor vote and they did not get to it. There were also Republican "no" votes out of committee who always vote against fees, and some more liberal Democrats who are opposed to anything to do with “wealthy yacht owners.” Jim suggests that 1906 will likely re-appear in the next Legislative session, since there was not a robust opposition.

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Plus - Review Jim's final Legislative Update of the session, recapping popular bills, upcoming initiatives and more.

NYBA lobbyist Jim Hedrick has sent us the following updates regarding to maritime-specific bills that were moving their way through the Washington State Legislature. 

• HB 1919 allowing private moorage to more easily sell abandoned vessels has passed the Legislature – see below.
• HB 1906 re: Changing the vessel length for non-resident permits from max 200' length to max 300' length has DIED IN COMMITTEE, it did not come to a vote in the Senate. This means that the current statute will remain in place, i.e. vessels larger than 200 feet will NOT be able to apply for non-resident cruising permits in the state of Washington. 

HB 1919 – Modifying the process by which a private moorage facility may sell an abandoned vessel for failure to pay moorage fees.  The Bill: Changes, from 90 days to 45 days, the amount of notice that a private moorage operator must provide to a vessel owner before a vessel may be sold for failure to pay moorage fees. Changes, from 60 days to 40 days, the timeline by which a lawsuit to challenge the validity of a private moorage facility's impoundment of a vessel must be commenced.  Passed Legislature.