Use tax: Vehicles & boats
Use tax is a tax on items used in Washington when sales tax hasn't been paid. When you purchase a vehicle or vessel from a private party, you're required by law to pay use tax when the vehicle or vessel title is transferred.
Use tax rates
Use tax is calculated at the same rate as the sales tax at the purchaser's address. In addition to the general use tax rate, vehicles are charged an additional 0.3% motor vehicle sales/use tax.
Vehicles received as gifts
- If you can provide proof that the person who gave you the vehicle or vessel paid sales or use tax on the vehicle or vessel, no use tax is due.
- If the person who gave you the gift owned the vehicle for 7 years or more and is from a state or province with sales tax, it will be assumed that tax was paid and no proof is needed.
- If the vehicle or vessel is coming from a state or province without sales or use tax, use tax is due.
If you buy a vehicle while on active duty with the military, you may be exempt from paying use tax. For more information, see Tax exemptions: Military personnel.
Frequently asked questions
Why use average fair market value and not actual sale price?
Fair market value reflects the value of a vehicle according to the retail selling price at the place of use, compared to similar vehicles of like quality or character. The actual selling price may or may not be the same as the average fair market value in cases when an individual sells a used vehicle or vessel.
How is the fair market value determined?
We get average fair market values from Price Digests, an industry standard source.
What if a vehicle or vessel is worth less than the average fair market value?
To establish that a vehicle or vessel is worth less than the average fair market value, the buyer may provide:
- An estimate of repairs prepared by a registered mechanic.
- An appraisal prepared by a registered dealer.
- Documentation from another value source, such as National Auto Dealers Association (NADA) or Kelley Blue Book that cites a lower average retail value for the vehicle or vessel. The purchase price will be accepted if it is within 20% of the value cited by the alternate source. Either photocopies of printed materials or a printout from the Internet are acceptable.
- A completed Department of Revenue Declaration of Buyer and Seller Regarding Value of Use Vehicle Sold form stating the selling price and condition of the vehicle. Both the buyer and the seller must sign the form. These are subject to review.
Does the Department of Revenue use the same valuing system?
Yes, the Department of Revenue uses exactly the same values as the Department of Licensing. Since 1999, both agencies use an automated valuing system that receives data from Price Digests.
For more information
- Call us at 360.902.3770 and choose the option to speak with a customer service representative.
- Visit the Department of Revenue's use tax web page.
RCW 82.12.010: Definition of use tax