Clean alternative fuel and plug-in hybrid vehicles - sales/use tax exemptions

Beginning Aug. 1, 2019, a sales and use tax exemption for new or used clean alternative fuel and certain plug-in hybrid vehicles is available. The Department of Licensing maintains a list of qualifying vehicles.

Qualifying vehicles

The exemption will be applied to the sales price or fair market value when you purchase or lease a passenger car, light duty truck, or medium duty passenger vehicle that is powered exclusively by a clean alternative fuel or capable of traveling at least 30 miles using only battery power.

In addition, the vehicle must be sold or valued at $45,000 or less if new and $30,000 or less if used.

Exemption amounts

For qualified vehicles, the exempted amount is determined as follows:

Purchasing from an auto dealer

The auto dealer you purchase or lease the vehicle from must keep records to support the exemption. You, the buyer, do not need to report the exemption.

Requesting a sales or use tax refund

You may apply to the Department of Revenue by submitting an application for refund of use tax or refund of sales tax, if you paid sales or use tax in error between Aug. 1, 2019 and July 31, 2025.

Sales and use tax exemptions expiration dates

• The exemption for sales of new and used qualifying vehicles expires July 31, 2025.
• Leases that qualify for this exemption on or before July 31, 2025, can continue to claim the exemption on lease payments due through July 31, 2028.

For questions about the exemption, call 360-705-6705.