Seattle Electric Vehicle Assocation (SEVA)

The Washington sales tax break will be revived as of August 1, 2019. It was expanded from the previous version to also apply to sales of used electric cars. As before, electric vehicle leases also get a sales tax break. Hydrogen fuel cell electric vehicles could also qualify for the tax break, but no Pacific Northwest dealers currently stock or sell new hydrogen-powered cars.

To qualify for Washington’s tax abatement, a new vehicle’s sales price has to be less than $45,000 and a used electric passenger vehicle less than $30,000. These thresholds are meant to screen out buyers of high-end Teslas and BMWs. Oregon’s rebate program operates with the same philosophy, but uses as its eligibility cutoff a base model MSRP of less than $50,000.

The Washington sales tax break is structured to ramp down and then phase out completely after six years.

For the first two years beginning this August, $25,000 of a new alternative fuel vehicle’s price is sales tax free. The untaxed portion shrinks to $20,000 in 2021 and then down to $15,000 in 2023. For used EVs, $15,000 of the sales price is tax free throughout the period.

The sales tax break is scheduled to expire on July 31, 2025.

The revived and modified sales tax break passed the Washington Legislature with bipartisan support, but with just hours to spare on the last day of the 2019 session. It passed in the state Senate 31-17. The final vote in the House of Representatives on Sunday was 91-7.

The state incentives in Oregon and Washington are in addition to a federal income tax credit worth up to $7,500 for buyers of certain models of new all-electric vehicles.