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.)
Sales of motor vehicles and trailers used for transporting persons or property for hire in interstate or foreign commerce are exempt from retail sales tax if one of the following requirements is met:
The terms "leasing" and "renting" can be used interchangeably and refer to the act of granting another the right of possession to and use of a vehicle for a specified time and, ordinarily, for fixed payments.
“Capitalized (Cap) Cost Reduction” (aka Cap Reduction Payment):
The "Lemon Law" is a law which allows customers who purchase a new vehicle which is defective or has chronic problems to obtain relief.
The law allows the consumer to obtain retail sales tax refunds directly from the manufacturer or new car dealer acting on behalf of the manufacturer when the manufacturer or the new car dealer buys back the "lemon." The manufacturer or new car dealer acting on behalf of the manufacturer may then request a refund or credit directly from the Department of Revenue.
A maintenance agreement (contract), sometimes called a service agreement (contract), is an agreement which requires specific performance of repairing, cleaning, altering, or improving tangible personal property on a regular or irregular basis to ensure the product's continued satisfactory operation.
Members of the armed forces who purchase vehicles in Washington are required to pay retail sales tax if they intend to remain here more than three months. This is true even if they claim a home of record in a state other than Washington and even if they register the vehicle under the laws of their home state.
Effective Jan. 1, 1990, sales of vehicles or trailers to nonresident members of the armed forces are exempt from retail sales tax only if all of the following requirements are met:
Many persons claim residency in both Washington and another state by virtue of spending near equal amounts of time in each state.
When such a person buys and takes possession of a vehicle in the state of Washington, the retail sales tax and B&O tax are due.
Federal law provides that the sales of tangible goods, including motor vehicles, to tribes and enrolled tribal members are exempt from retail sales tax if the goods are delivered to or the sale is made in the tribe or enrolled tribal member’s Indian country.
Starting June 9, 2016, a new Washington law states there are updated requirements to document:
The sale of a motor vehicle was to a tribe or an enrolled tribal member and The motor vehicle was delivered to or the sale was made in the buyer’s Indian country.
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