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Washington exemptions for clean vehicles, July 2016

  • Jul 14, 2016 | Gail Cole

 Washington has changed the sales and use tax exemptions it provides for green vehicles.

Change may be inevitable and even good, but no one said it was easy.

The State of Washington has offered tax incentives to encourage the use of green vehicles for some time. Now, to encourage even more Washington drivers to exchange their dirty, gas-guzzling vehicles for clean, green, alternate fuel and plug-in hybrid vehicles, the state is offering new and improved sales and use tax exemptions.

Effective July 1, 2016, sales and use tax exemptions apply to the following:

  • Eligible vehicles delivered to the buyer/lessee on or after July 1, 2016 and before the exemptions expire.
  • New passenger cars, light duty trucks, and medium duty passenger vehicles that are exclusively powered by a clean alternative fuel or are plug-in hybrids that can travel at least 30 miles on battery power alone.
  • Vehicles with a lowest base model suggest retail price of not more than $42,500.
  • The first $32,000 of a vehicle’s selling price or the total lease payments made plus the selling price of the leased vehicle if the original lessee purchases the leased vehicle before the exemption expires. The expiration date of the exemption is contingent on the number of qualified vehicles titled in Washington on or after July 1, 2015.

Vehicles exempt from Washington sales and use tax are also exempt from the state 0.3% motor vehicle sales/use tax.

Click here for a list of qualifying vehicles and here for additional information from the Washington Department of Revenue.

This type of change in product taxability and exemptions is one reason sales and use tax compliance is so challenging. Automated sales tax software-as-a-service (SaaS) simplifies compliance, reduces audit risk, and saves time. Learn more.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.