TPS-TIE

What is a consignment sale?

A consignment sale is when the actual owner of a vehicle (the consignor) enters into a written agreement with a dealer (consignee) to sell a vehicle and to act as an agent for the vehicle owner.

What are dealer trades?

Automobile dealers often sell or trade inventory to other dealers for various reasons. Sometimes a vehicle is traded for another vehicle and sometimes it is merely sold to another dealership. Often these "trades" are booked as inventory transfers rather than as sales. Dealer trades differ from accommodation sales.

A driver education vehicle is one equipped with dual controls, loaned to and used exclusively by a school in connection with its driver training program.

School requirements

The term "school" applies only to:

What is an executive vehicle?

An executive vehicle is a vehicle regularly used by a dealer or a person associated with a dealership (firm executive, corporate officer, partner, or manager) who does not have a recent model car registered and licensed in his/her own name for personal driving.

Who is exempt from retail sales tax?

Dealers may sell vehicles or trailers to the following types of customers without collecting retail sales tax:

All vehicles purchased by a dealer and placed into inventory carry a surcharge from the manufacturer for interest expense credits. A portion of this surcharge is for the dealer's holdback program and the rest is for the dealer's Wholesale Floor Plan Protection Program (WFPP).

Holdback program

This amount is a credit to the dealer's open account in the month or quarter immediately following the date the vehicle is invoiced to the dealership.

​WFPP (Wholesale Floor Plan Protection Program)

This plan has two options.

Consumer tax collected by dealer as agent

Consumer taxes collected by the dealer as an agent for the federal government are not subject to the business and occupation tax and the retail sales tax. These taxes are calculated BEFORE the federal tax is added.

Examples of federal tax not subject to sales tax

A federal tax not subject to the retail sales or B&O tax is the 5% luxury tax charged on vehicles which cost over $38,000.

City, county, state governments

Are sales to city, county, or Washington state government exempt from retail sales tax?

The retail sales tax is due on sales of vehicles to the state of Washington, its departments and institutions and to counties, cities, school districts and all other municipal subdivisions of the state.

Ambassadors or foreign consuls are exempt from the retail sales tax, with limitations. Diplomatic Tax Exemption Cards are issued by the U.S. Department of State. These cards use four distinct images on the cards (owl, buffalo, eagle, and deer) to indicate the level of tax exemption authorized by a particular Diplomatic Tax Exemption Card.

Please note that the exemption under this program may not apply to all types of purchases. (See below for procedures for purchasing all motorized vehicles under this program.)