Learn about when we collect use tax and from whom, and how we calculate it.
Before you get started
Use tax is a tax on items used in Washington when the buyer hasn't paid sales tax. When you purchase a vehicle or vessel from a private party, you're required by law to pay use tax when you transfer the title into your name.
How we calculate use tax
We use a vehicle or vessel's fair market value (see below) to calculate use tax. The use tax is the sum of the 0.3% motor vehicle sales and use tax and the sales tax rate at the buyer's address. Contact a vehicle and vessel licensing office if you have questions about whether you must pay use tax.
How we determine fair market value
We get average fair market values from Price Digests, an industry standard source. The Department of Revenue uses the same automated valuing system that receives data from Price Digests.
Fair market value versus selling 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.
Vehicles worth less than fair market value
To establish that a vehicle or vessel is worth less than the average fair market value, you may provide any of the following:
An estimate of repairs
Provide us with an estimate of repairs prepared by a registered mechanic.
Provide us with an appraisal prepared by a registered vehicle or vessel dealer.
Documentation from another value source
Provide 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.
- We may accept the purchase price instead of the fair market value if the fair market value is below $7,500 or if the purchase price is within 20% of the fair market value.
- We accept photocopies of printed materials or a printout from the Internet.
A completed Department of Revenue declaration form
Provide us with a Declaration of Buyer and Seller Regarding Value of Use Vehicle Sold form. Both the buyer and seller must sign this form and it must:
- State the selling price of the vehicle or vessel
- The condition of the vehicle or vessel
Note: These are subject to review. You may also need to complete a Vehicle/Vessel Declaration of Value for Excise Tax form. Call a vehicle and vessel licensing office if you have questions or are unsure which forms you need to complete.
Vehicles received as gifts
If you received a vehicle or a vessel as a gift, you may not have to pay use tax when you transfer the title into your name.
You will not have to pay use tax if:
- You can provide proof that the person who gifted you the vehicle or vessel paid sales or use tax on the vehicle or vessel
- The person who gave you the gift owned the vehicle for seven years or more and is from a state or province with sales tax
You must pay use tax if:
- The vehicle or vessel is coming from a state or province that does not have sales tax
- You exchanged money, goods, or services in the transfer of ownership
If you buy a vehicle while on active duty with the military, you may be exempt from paying use tax. Learn more about tax exemptions for military personnel.