SHB 1043
In CommitteeHouse
Commute trip reduction
Extending the commute trip reduction tax credit.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill expands and extends Washington’s Commute Trip Reduction Tax Credit program, allowing employers and property managers to claim a larger state tax credit—up to $100 per person—for financially supporting sustainable commuting options like carpooling, public transit, biking, or car sharing. It also raises the overall annual credit cap and extends the program through 2035.
- Increases the maximum tax credit from $60 to $100 per person per fiscal year for employers and property managers who provide incentives for sustainable commuting (e.g., carpooling, transit, biking).
- Extends the program’s expiration date from July 1, 2025 to July 1, 2035, allowing the credit to be claimed through June 30, 2035.
- Raises the annual cap on total credits available statewide from $2.75 million to $4.3 million.
- Increases the individual business cap from $100,000 to $50,000 per fiscal year (note: this appears to be a typo in the bill text—$50,000 is *lower* than $100,000, but the bill explicitly states this reduction).
- Requires the Department of Revenue to ratably reduce credits if total applications exceed the annual cap, and prohibits carrying forward unused credit amounts from reduced awards.
Who is affected
- Employers and property managers — Businesses and property managers that offer financial incentives (like subsidies or reimbursements) to employees or tenants for commuting alternatives (e.g., carpooling, transit, biking) can claim a state tax credit for those payments.
- Commuters using alternative transportation — Employees and tenants who receive financial support from their employer or property manager to use sustainable commuting methods may benefit indirectly through reduced commuting costs.
- State of Washington (Department of Revenue) — State government collects less tax revenue due to the tax credits issued, and must manage the program within a capped annual budget.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
By increasing the credit to $100 per person and extending it to 2035, the bill makes it more financially viable for employers and property managers to subsidize transit, biking, carpooling, and car sharing—potentially reducing car dependency, traffic congestion, and emissions for everyday commuters.
TransportationPeopleRef: Sec. 1(1), Sec. 1(2), Sec. 1(3)The expanded credit incentivizes low-carbon commuting modes, supporting Washington’s climate goals under the Clean Energy Transformation Act—especially in high-traffic corridors like the I-5 corridor and Puget Sound region.
EnvironmentPeopleRef: Sec. 1(1), Sec. 1(2), Sec. 1(3)Encouraging alternatives to solo driving may reduce traffic accidents and fatalities, especially during peak commute hours—benefiting all road users, particularly vulnerable road users like pedestrians and cyclists.
Public SafetyLean peopleRef: Sec. 1(1), Sec. 1(2)Property managers of multifamily residential buildings (e.g., apartment complexes) can now claim credits for subsidizing employee/tenant commuting—potentially lowering transportation costs for low- and moderate-income renters who rely on transit or shared mobility.
HousingPeopleRef: Sec. 1(1), Sec. 1(2), Sec. 1(3)The expanded credit may help employers attract and retain workers—especially younger workers and those without cars—by offering meaningful commuting benefits, improving workforce stability and reducing absenteeism.
Business & EmploymentPeopleRef: Sec. 1(1), Sec. 1(2), Sec. 1(3)
Potential Concerns (5)
The credit is capped at $100 per person and $50,000 per business per year, and is non-refundable—meaning low- and middle-income workers who receive the benefit indirectly (via employer subsidies) may see only modest savings, while larger employers with more employees can capture more total credit value, but still face a hard cap that limits scalability.
FinancialRef: Sec. 1(3); Sec. 2(1)(a); Sec. 2(3)The $50,000 annual cap per business (down from $100,000) and the ratably reduced, non-carryforward structure disproportionately harms small and mid-sized employers who cannot absorb the administrative burden of applying for credits without guarantee of full reimbursement—especially in high-cost areas where $100/employee may not cover meaningful incentives.
Business & EmploymentPeopleRef: Sec. 2(1)(a); Sec. 2(3)The state permanently reduces annual revenue by up to $4.3 million—funds that could support public transit, road maintenance, or other transportation infrastructure—potentially increasing long-term congestion and infrastructure costs borne by all commuters.
FinancialRef: Fiscal Impact section; Sec. 2(1)(a)The credit excludes residential property owners who are not also employers or property managers of commercial worksites—meaning most homeowners and renters (especially in multifamily housing) cannot directly access or benefit, even if they rely on alternative commuting.
HousingPeopleRef: Sec. 1(1), Sec. 1(2), Sec. 2(3)The prohibition on carrying forward unused credits and the ratably reduced award structure create uncertainty for employers—especially small businesses—making it harder to plan and sustain commuting benefit programs, potentially discouraging participation altogether.
Business & EmploymentPeopleRef: Sec. 2(1)(b); Sec. 2(3)
Who Is Most Affected
Small and mid-sized employers (e.g., retail shops, tech startups, restaurants) may find the $50,000 cap and non-carryforward rule limiting—especially if they serve many low-wage workers who rely on public transit. While the credit may help them offer competitive benefits, the administrative burden and uncertainty reduce net benefit.
Low- and moderate-income commuters may benefit indirectly if their employer or landlord passes along savings from the credit—e.g., reduced transit passes, bike-share memberships, or carpool incentives. However, since the credit is not directly refundable or targeted, benefits are uneven and may skip those without formal employer support.
Large employers (e.g., Amazon, Microsoft, Boeing, hospitals, universities) are best positioned to maximize the credit due to scale and administrative capacity—though the $50,000 cap still limits upside. They may use the credit to enhance benefits packages and meet ESG goals, but the policy does not require them to pass savings to workers.
Property managers of apartment complexes and mixed-use developments can claim credits for subsidizing tenant commuting—potentially lowering renter transportation costs. However, the benefit is only realized if the property manager chooses to pass savings to tenants, and the credit does not apply to owner-occupied housing.
The state loses up to $4.3M/year in revenue, which could have been invested in transit infrastructure, road maintenance, or direct commuter subsidies. Over a decade, that’s $43M less for public transportation—potentially worsening congestion and service gaps over time.