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.

Exemption amounts

The exemption applies to a portion of the new or used vehicle sales price.

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

The exemption will be applied to the sales price or fair market value when you purchase or lease a new passenger car, light duty truck or medium duty passenger vehicle that meets one of the following requirements:

• The vehicle is powered exclusively by a clean alternative fuel.
• The plug-in hybrid is capable of traveling at least 30 miles using only battery power, and sold or valued at $45,000 or less.

For qualified used vehicles purchased or leased between Aug. 1, 2019 and Jul. 31, 2025, there is a sales and use tax exemption available for up to $16,000 of the sales price or lease payments.

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 Jul. 31, 2025.

Sales and use tax exemptions expiration dates

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

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