Alternative Fuel Vehicle (AFV) Tax Exemption

New passenger cars, light-duty trucks, and medium-duty passenger vehicles that are dedicated AFVs are exempt from state motor vehicle sales and use taxes. Qualified vehicles include vehicles capable of operating exclusively on natural gas, propane, hydrogen, or electricity, and plug-in electric vehicles that are capable of being charged by an external power source and can travel at least 30 miles using only electricity. Qualified vehicles must meet the California motor vehicle emissions standards and comply with the rules of the Washington Department of Ecology. The sales tax exemption applies to up to $32,000 of a vehicle's selling price or the total amount of lease payments made. If the original lessee purchased the leased vehicle before the exemptions expire, the exemption applies the total lease payments made plus the selling price of the leased vehicle, up to $32,000. The sales tax exemption expires July 1, 2019. A vehicle purchased or leased before July 1, 2019, is exempt from the use tax until it is retired or changes hands. For more information, see the Green Incentives section of Washington Department of Revenue's Incentives Programs website. (Reference House Bill 2778, 2016, and Revised Code of Washington 82.08.809 and 82.12.809)

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