Clean alternative fuel and plug-in hybrid vehicles - sales/use tax exemptions
The sales and use tax exemption for clean alternative fuel, electric, and plug-in hybrid vehicles expires June 1, 2018, and the last day to use this exemption is May 31, 2018. What this means is that you must take delivery of the vehicle by May 31, 2018 to claim the exemption.
This happened because the total number of qualifying vehicles titled in Washington since July 15, 2015 reached 7,500 vehicles. (View link at the bottom of this page for monthly numbers). The law requires this exemption to end one month after the Department of Licensing (DOL) notifies us about this number.
How do I know if the vehicle I chose qualifies?
You can find out if your vehicle qualifies by reviewing the date range below that applies to your situation.
From July 1, 2009 through June 30, 2015:
You can use this exemption if you purchased or leased one of the following that is powered by clean alternative fuels:
- a new passenger car
- a light duty truck, or
- a medium duty passenger vehicle
If you signed a lease on a qualified vehicle before July 1, 2015, your lease payments will continue to be exempt from sales tax for the rest of the lease agreement. This remains true regardless of the vehicle’s fair market value.
From July 15, 2015 through June 30, 2016:
You can use this exemption if all the following apply:
1. You purchased or leased:
- a new passenger car
- a light duty truck, or
- a medium duty passenger vehicle.
AND
2. The item you purchased or leased is:
- powered by clean alternative fuels; or
- is a plug-in hybrid capable of traveling at least 30 miles using only battery power; and
- is sold or valued at $35,000 or less (including the amount of any trade-in vehicle).
If you signed a lease on a qualified vehicle on or after July 15, 2015 and before July 1, 2016–and the fair market value of the vehicle was less than $35,000 at the beginning of the lease–you do not owe sales tax on your lease payments.
From July 1, 2016 through May 31, 2018:
You can use this exemption if all the following apply:
1. You purchase or lease one of the following vehicles that has a base model price less than $42,500 (DOL determines this model price):
- a new passenger car
- a light duty truck, or
- a medium duty passenger vehicle.
AND
2. The vehicle you purchase or lease is:
- powered by clean alternative fuels; or
- is a plug-in hybrid capable of traveling at least 30 miles using only battery power, and
- is listed on DOL’s qualifying vehicles list: http://www.dol.wa.gov/vehicleregistration/altfuelexemptions.html.
The exemption applies up to $32,000 of a vehicle’s:
- selling price; or
- total lease payments you’ve made, plus the purchase price of the leased vehicle.
Do I need to report this exemption?
- No, the dealer you purchase or lease the vehicle from must keep records to support the exemption.
For questions about the exemption, call Taxpayer Account Administration at 360-705-6214.