When you purchase, lease or convert an Electric Vehicle in Washington State
- NO SALES TAX – In 2016 House Bill 2778-S was signed into law. Effective July 1, 2016, buyers or lessees of new electrically powered vehicles pay NO SALES TAX in Washington State on the first $32,000 of the selling price or total lease payments made for vehicles that meet these requirements: a) the base model Manufacturer’s Suggested Retail Price (MSRP) less than $42,500 as determined by the Department of Licensing; b) the vehicle is all-electric; c) vehicle is a plug in hybrid electric vehicle that has an internal combustion engine providing range extension and that has a battery only range of 30 miles or more . The new law requires the Department of Licensing to maintain a list of qualifying models of vehicle for the exemption based on its MSRP. The law expires two months following the determination that 7,500 qualified vehicles have been titled, with an ultimate expiration of June 30, 2019 regardless of the number of titled vehicles. The Department of Revenue must provide notice on its website of the expiration of the exemption and report to the transportation committees of the legislature on a semi-annual basis the number of eligible vehicles that have been titled. Leased vehicles must continue to receive the tax exemption through the life of the lease if signed before the expiration of the exemption. At 9.5% in Seattle, that could save you thousands of dollars.
- 2023-2042 “IRA” (Inflation Reduction Act) Clean Vehicles IRS Income Tax Credit – has replaced the previous incentives, still listed below for reference. These regulations are still in flux and being negotiated, so for now we will link to some additional reference materials:
- * irs.gov manufacturers and models for new qualified clean vehicles
- * myeva.org PDF: EVs and the Inflation Reduction Act – Google Slides
- * Additional incentives Calculator: ReWiring America: How much money will you get with the Inflation Reduction Act?
- * YouTube:Plug In America: What You Need To Know About 2023 Federal EV Tax Credits
- * YouTube:Now You Know: New EV Credit – What You Need to Know | In Depth
- * YouTube:…
- * …
- * TLDR; Income < $150k Single or < $300k Joint; Vehicle MSRP < $55k for sedans or $80k for suv and trucks; 50% of rebate due to Assembly in North America or Free Trade Partners; 50% of rebate due to Battery Raw Materials Sourced from N.A. and the remaining half for Battery Production and Assembly in N.A. (This Battery Portion is YouTube:Aptera Owner’s Club: EV tax credit updates. No mineral requirements and leasing loophole. postponed until ~March of 2023 while being finalized (as no vehicles would currently qualify as originally written)); Note that many PHEV (Plug-in Hybrid Electric Vehicles) qualify
and perhaps even some non-plug-in hybrids with very small batteries may end up qualifyingfor the new rebate, those with 11kWh and larger batteries may qualify for the full amount. None Plug-in (Gas Only) Hybrids still do not qualify for this incentive.
- ** Voice Your Opinion: Proposed Collection; Requesting Comments on Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit and Revenue Procedure 2022-42
- * YouTube:Tesla Daily: Big EV Credit Updates, Tesla Production Estimates, Leaked Musk Email
- * YouTube:Ryan Shaw: No Tax Credit For 2023 Tesla Model Y | This Is Absurd
- * YouTube:Farzad Mesbahi 2023 IRA EV Tax Credit Is BROKEN #TSLA
- * YouTube:Aptera Owner’s Club: IRS open public comment on the EV tax credit. We should give it to them.
- * YouTube:Now You Know: No Tax Credit For Model Y!? | Tesla Time News
- * On 2023.01.12 Tesla lowered their prices such that the Model Y Standard Range will now qualify:
- * YouTube:Tesla Daily
- * YouTube:Electrified
- * YouTube:Farzad Mesbahi (Full 1.5 hour discussion)
- * YouTube:Tesla Economist
- * YouTube:Brighter with Herbert
- * YouTube:Dr. Know-it-all Knows
- * YouTube:Autoline Network
- * YouTube:The Electric Viking
- * YouTube:Cleanerwatt – Buy a Tesla Model Y with EGGS? | Tesla Price Reductions
- * YouTube:…
- The following have Expired at the end of 2022, but may still be of use during 2023 while preparing your 2022 tax documents:
TAX CREDIT FOR EV PURCHASE – The federal government will give you a credit on your income taxes of up to $7,500 for purchasing a new electric vehicle. You must owe at least $7,500 in taxes to get the full tax credit. You receive this refund when you file your taxes for the year you purchase your vehicle. If you lease an electric vehicle, make sure the seller/dealer passes the federal tax credit on to you. You may need to fill out one or more of these forms:
- Form 8911 – Alternative Fuel Vehicle Refueling Property Credit – get a one-time credit of 30 percent of the cost of installing electric vehicle charging equipment. Anyone who purchased a home charging station and wants an refund for the sales tax they paid, or anyone who is considering purchasing a home charging station and wants to claim the Washington state exemption must submit a Buyers Retail Sales Tax Exemption Certificate.
- Form 6251 – Alternative Minimum Tax – Individuals. Required for anyone filing Form 8911, even if you do not owe or pay the alternative minimum tax.
- Form 8834 – Qualified Plug-in Electric and Electric Vehicle Credit – get one or more credits for the purchase of a two- or three-wheeled electric vehicle or a low-speed four-wheeled vehicle acquired before 2012.
- Form 8936 – Qualified Plug-in Electric Drive Motor Vehicle Credit – get one or more credits of up to $7,500 on the purchase of a new plug-in electric vehicle.
|GVWR||Maximum Credit Amount Per Vehicle|
|Up to 14,000 pounds (lbs)||$5,000|
|14,001 to 26,500 lbs||$10,000|
|Over 26,500 lbs||$20,000|
This exemption also applies to qualified used vehicles modified with a U.S. Environmental Protection Agency-certified aftermarket conversion, as long as the vehicle is being sold for the first time after modification. The converted vehicle must be less than two years old and have an odometer reading of fewer than 30,000 miles. Modified vehicles are eligible for credits equal to 30% of the commercial vehicle conversion cost, up to $25,000.
Each entity may claim up to $250,000 or credits for 25 vehicles per year. Credits may be earned between January 1, 2016, and January 1, 2021. All credits earned must be used in that calendar year or the subsequent year. Tax credits are available on a first-in-time basis and are subject to annual limits of $2 million per weight class.