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Washington Qualified State Tax Exemptions

Alternative Fuel Vehicles and Plug-In Hybrids

Washington State Tax Exemptions

On August 1, 2019, the sales and use tax exemption was reinstated for the sales of:

  • Vehicles powered by a clean alternative fuel
  • 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 price or lease payments. Used vehicles transactions must not exceed $30,000 in price or lease payments. These price thresholds include both the cost of the vehicle and the value of your trade-in, if applicable.

For example: 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. You cannot use a trade-in to lower the price of a vehicle to meet the exemption limits.