In 2019, Washington State reinstated the sales and use tax exemption for the sales of vehicles powered by a clean alternative fuel and certain plug-in hybrids.
The exemption applies to dealer and private sales of new, used, and leased vehicles sold on or after August 1, 2019.
- New vehicle transactions must not exceed $45,000 in purchase price or lease payments
- Used vehicles transactions must not exceed $30,000 in fair market value or lease payments
You cannot use a trade-in to lower the price of a vehicle to meet the exemption limits.
If you have questions, you can call the Department of Revenue's (DOR) Tax Assistance line at 360-705-6705.
If the cost of a new vehicle is $48,000, and the value of your trade-in is worth $6,000, you can't receive the tax exemption. Even though the trade-in brought the cost down to $42,000, the new vehicle was still worth over the $45,000 limit.
Related laws and other resources
- RCW 82.08.809: Exemptions-Vehicles using clean alternative fuels and electric vehicles, exceptions-Quarterly transfers
- RCW 82.12.809: Exemptions-Vehicles using clean alternative fuels and electric vehicles, exceptions-Quarterly transfers
- E2SHB 2042 - Laws of 2019: Advancing Green Transportation Adoption
- Electric vehicle population and transaction interactive data sets (data.wa.gov)
- The current list of qualifying vehicles (data.wa.gov)
- Frequently asked questions: Alternative Fuel Vehicles and Plug-In Hybrids Tax Exemptions
- Incentive Programs: Deferrals, Exemptions, and Credits