Automobile manufacturers assigning cars to their employees in Washington

Automobile manufacturers or distributors will often assign vehicles to their employee representatives for demonstration purposes, sales solicitation, and personal use in the state.

What is required?

An employee representative of an automobile manufacturer or distributor may license an automobile in Washington by going to a Department of Revenue office and completing a Declaration of Use Tax showing the name of the manufacturer or distributor. The form will show that use tax is not due based on WAC 458-20-132 (8).

How can a factory rep license vehicles?

It is common practice to replace these vehicles frequently so that several vehicles may be used by a company representative during the course of the year.

Factory representatives may exchange vehicles every three or four months or a certain number of miles.

How are they taxed?

When employee representatives desire to license replacement automobiles of the same model year, the department will waive payment of use tax on the replacement, provided that use tax has been paid under the following formula:

Computation of the use tax is based on the average selling price of all new cars sold in the preceding year multiplied by the maximum complement of cars of each model year in use at any time during the year. The tax is due at the start of the model year. No further use tax is due on the usual turnover or replacement of cars within the model year.


A copy of the Declaration of Use Tax will be retained by the Department of Revenue. A Department of Revenue auditor may later verify payment of the appropriate amount of use tax.

Limited use

This ruling applies only to automobile manufacturers and their distributors when the vehicle is being registered in the name of the respective manufacturer or distributor.


Washington Administrative Code (WAC) 458-20-132