Earlier this year the Washington state legislature enacted Engrossed Substitute Senate Bill 5801 (Chapter 417, Laws of 2025) changing a number of taxes and fees related to motor vehicles and other forms of transportation. As part of this law the additional 5.9% sales tax imposed on retail car rentals of 30 days or less will increase to 11.9% on January 1, 2026. The rate is then scheduled to decrease to 9.9% in 2027. The law has also increased the additional sales tax on motor vehicle sales to 0.5% from 0.3%.
Washington Rental Car Tax to Increase in 2026
Andrew Decker
December 22, 2025
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Author
Andrew Decker
Andrew Decker is a Regulatory General Counsel at Sovos within the Regulatory Analysis & Design Department. Andrew focuses on international VAT and GST issues and domestic sales tax issues. Andrew received a B.A. in Economics from Bates College and J.D. at Northeastern University School of Law. Andrew is a member of the Massachusetts Bar.
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