Already facing uncertainty from Trump’s tariff threats, an e-bike tax ‘would be awful’ for Washington’s struggling bike shops

One Less Minivan." From a family bike camping trip to Lopez Island last year. On the trip, we stopped at businesses in King, Skagit and San Juan Counties. A WA Senate proposal would add at least $450 to the cost of this family cargo bike and risk putting mechanics that can maintain it out of business.

Just a couple weeks ago, we wrote about how the Trump Administration is attacking walking, biking and transit projects that are due to receive federal funding. These cuts will put our local, regional and state governments and agencies under great strain as they try to keep people moving safely. Compounding these problems for local bike shops, Trump's reckless tariffs and tariff threats are putting a ton of uncertainty on future costs and margins as they threaten huge increases in the cost to import e-bikes, batteries and other components.

Yet Senate Bill 5801, which is the Washington State Senate's take on funding transportation, would make it even more difficult for bike shops across the state to stay open. The bipartisan bill, which comes from a chamber that state Democrats control by a 30 to 19 margin, proposes a 10% surcharge on all e-bike sales in the state while also removing toll exemptions for transit vehicles and charging transit agencies millions in vehicle registration fees.

Transportation Choices Coalition put out an action alert urging people to contact their legislators urging them to oppose the new transit fees and e-bike taxes. Making it more expensive to bike or take the bus will only encourage more people to drive alone and worsen traffic and climate pollution," TCC wrote in the alert.

It would be awful," said Tyler Gillies, owner of Dandelion Bikes at 18th and Jackson in Seattle. Nearly every bike Dandelion sells would see an extra 10% in new taxes on top of the existing 10.35% sales tax. I would bet good money that if there is a 10% sales tax added to e-bike sales in Washington state, many of my customers would be driving to Oregon to buy a bike. They would be saving 20% [...] If someone bought a $4,000 bike here, they would be paying $800 in tax."

Gillies was exasperated during our conversation. He was worried about the impact on bike shops across the state, including his. But he was also worried about harming biking in the state in general.

The impact on the store is certain," said Gillies. But outside of Dandelion, it's a huge bummer for bike riding in general in Washington." There are a lot of people who simply don't have an extra $400 lying around and may choose not to buy an e-bike at all because of the tax. $4,000 might sound like we're talking about luxury bikes here, but that's a standard price for the kinds of car-replacing cargo bikes that have been growing in popularity. These are bikes that can simultaneously haul kids and a bunch of groceries up Seattle hills. These are the kinds of bikes that take cars off the state's highways, reducing congestion and wear while also being an order of magnitude more energy efficient than any car and improving public health.

[E-bikes] enable people to go about their daily lives - commuting to work, shopping, visiting friends, doing school pickup - with less stress and expense than making these trips with a car," said Gillies. E-bikes are net positive for society. They make people healthier. They reduce air and water pollution. They get cars off the road. This is as true in Gold Bar as it is in Seattle. Our state government should be doing everything it can to encourage e-bike ridership."

Just a few years ago, the legislature seemed to agree with Gillies, approving an e-bike rebate program to encourage more people to buy them. When that program was threatened by a statewide initiative that would have cut its funding source, voters soundly rejected I-2117 in November and protected the e-bike rebate funds along with it. It is legislative whiplash to offer e-bike rebates one year, then increase e-bike taxes the next. Worse, the cons of the e-bike tax would far outweigh the pros of the rebates since the rebates will be limited and doled out by lottery while the tax will apply to everyone.

The e-bike rebate program was written specifically to support bike shops with local, physical locations and repair services. The rebates are designed to ensure that bikes purchased using the rebates can have access to maintenance so they keep running for as long as possible. It's far too common for people to buy a bike from a budget online retailer only to find it difficult or impossible to find a bike shop that can fix it. Many shops are understandably hesitant to work on e-bikes with batteries from unknown sources, for example, since budget e-bike batteries have been prone to catching fire. Some budget bikes also use proprietary parts that bike shops can't order. If you are shopping for an e-bike, and you find a bike online with a price that seems too good to be true, you are probably right.

The state budget continues to fund this over-built freeway expansion project that includes sweeping cloverleaf ramps that occupy multiple city blocks in downtown Vancouver, Washington. Scaling this design back could not only save a ton of money, but also improve Vancouver's downtown. Image from The Interstate Bridge Replacement Program website.

Even worse, the tax would be a large amount for prospective buyers and bike shops, but a small amount for the state's transportation budget. It is expected to raise just $9 million over six years, which is barely a rounding error in one of the state's many highway expansion projects that would retain funding in the current House and Senate proposals. Highway projects are measured in hundreds of million or even billions of dollars. The state would risk doing substantial harm to bike shop availability and jobs while gaining almost nothing in proportion to the transportation budget. Losing bike shops might even end up costing the state since those shops pay B&O taxes and sales taxes while also employing people and keeping cars off the deteriorating and congested roads.

The bike shop business model is struggling due largely to competition from online retailers. While competition lowering prices for consumers is usually considered a good thing, a bike shop is not merely a source for buying a new bike but a vital piece of bicycle infrastructure. Washington State needs bike shops to keep their doors open so that residents can keep their bikes in working order. For a standard bike shop business, the bike sales and the repair mechanics are linked. If the state were to devastate bike sales through a new e-bike tax that makes them unable to compete on price, they would also put the state's bike repair mechanics out of work. Washington cannot afford to keep losing bike shops.

Cascade Bicycle Club has so far taken a somewhat nuanced stance on the e-bike tax idea. In general, we are not supportive of an e-bike tax," said Cascade Executive Director Lee Lambert. However, if the revenue is needed, we would encourage them to exempt bikes that meet the EN or UL standards and meet the state e-bike classifications." EN and UL are common third-party safety certifications that cover most e-bikes from established makers that local bike shops would sell (EN is common in Europe and UL is common in the U.S., though there are other certification companies as well). The state's 3-class system for e-bikes set power and speed windows to help govern the use of e-bikes on streets and paths. There is a world of other e-bikes that exist outside of these certifications and classes, such as bikes that can exceed 750 Watts of power, can exceed assisted speed limits, or have low-end batteries that have not been certified by a third party such as EN or UL. New York City's e-bike safety rules from 2023 require all e-bike batteries to have a third party certification, for example, so there are precedents for using these certifications in legislation.

Meanwhile, opening this debate is a downright embarrassment" for the state, said Gillies. Didn't Washington just win the most bikeable state award?" They did, though passing an e-bike tax is a great way to lose it next time.

As The Urbanist reported, the e-bike tax idea likely came from Republican Senator and bill co-signer Curtis King, who has proposed various bike taxes and tolls in the past. The idea is based on the argument that people who bike are benefiting from state infrastructure without paying into it the way car drivers do. But this argument ignores that a huge share of transportation funds come from general sources that everyone pays into, including bike riders. Many bike riders also own cars and pay all the same vehicle registration fees as drivers who don't ride bikes. But more importantly, it is in the state's interest to increase the number of people biking because they represent fewer cars contributing to wear and tear on highways or merging into the daily traffic jams. Including walking and biking connections as part of a highway project is not only the obviously right thing to do for the local community, but it is also better for the adjacent highway's capacity. It is in drivers' best interest to encourage more walking and biking. E-bikes are a solution to the state's transportation challenges, not a cost.

Senate Democrats made the call to release a bipartisan funding measure rather than use their majority to put forward their party's vision for funding transportation work. We will see if that strategy pays off, but at the moment it seems to have made everybody angry and introduced new fights that folks weren't expecting to have.