Beginning January 1, 2009, purchases of new high mileage hybrid vehicles and purchases of new vehicles that use clean alternative fuels are exempt from retail sales tax.

Purchases of new passenger cars, light duty trucks, and medium duty passenger vehicles are exempt from sales and use tax if they meet the definition of a "new motor vehicle" and either:

• Are powered exclusively by clean alternative fuel such as natural gas, propane, hydrogen or electricity, or
• Use hybrid technology and have a US Environmental Protection Agency estimated highway gasoline mileage rating of at least 40 miles per gallon.

Also exempt from sales tax are purchases of new vehicles that are converted prior to or as part of the retail sale to:

• be exclusively powered by clean alternative fuel, or
• use hybrid technology and have an EPA estimated highway gasoline mileage rating of at least 40 miles per gallon.

Please see our Special Notice, "New Sales and Use Tax Exemptions for High Mileage Hybrid and Clean Alternative Fuel Vehicles" for detailed information.