[ErickF]

In Washington, there is a sales tax exemption on the first $25,000 of of an EV. The purchase price, including destination charge and fees, must be no more than $45,000. With the 1st Edition, the total of MSRP and destination charge is $45,190. The value of your trade, rebates, etc. cannot be used to reduce this amount.

I've messaged with two buyers who have reported their dealers have adjusted the MSRP by $200-250 (and possibly paying fees up front) to make it all work.

Details:

Clean alternative fuel and plug-in hybrid vehicles - sales/use tax exemptions | Washington Department of Revenue

dor.wa.gov

 

[plh]

Any idea how the WA state EV sales tax exemption works on a leased vehicle? Seems possible if the residual is high enough in theory the leasee may not have to pay sales tax...?

 

[nigela]

In Washington, there is a sales tax exemption on the first $25,000 of of an EV. The purchase price, including destination charge and feeds, must be no more than $45,000. With the 1st Edition, the total of MSRP and destination charge is $45,190. The value of your trade, rebates, etc. cannot be used to reduce this amount.

I've messaged with two buyers who have reported their dealers have adjusted the MSRP by $200-250 (and possibly paying fees up front) to make it all work.

Details:

Clean alternative fuel and plug-in hybrid vehicles - sales/use tax exemptions | Washington Department of Revenue

dor.wa.gov

Very handy. I’m in Washington and was agonizing over the tax hit.

 

[xavalepdx]

Any idea how the WA state EV sales tax exemption works on a leased vehicle? Seems possible if the residual is high enough in theory the leasee may not have to pay sales tax...?

Any idea how the WA state EV sales tax exemption works on a leased vehicle? Seems possible if the residual is high enough in theory the leasee may not have to pay sales tax...?

The tax exemption works the same for a lease. Car has to be below $45,000 to qualify. Lease payment includes sales tax each month, so you would not have to pay the sales tax during your lease term. Hope this helps.

 

[JingoRM]

I am new to the forum, but a long time lurker since I placed my order for a Pro AWD last October and upgraded to the FE in January as I was hoping to be able to negotiate a price below 45K to take advantage of the sales tax exemption. I am at step 4/7 and ordered from VW of Kirkland. Took a test drive yesterday and met the EV specialist, James Park. The price he quoted me was the MSRP + Destination of $45,190. They also add a dealer doc fee of $150. I have two questions:

1. What items are included in the 45K selling price for the sales tax exemption? Just MSRP and Destination? Or are items like the dealer fees and title and registration included?
2. ErickF, you said two dealers in the area adjusted the selling price for the FE to get below $45K, were either of those VW of Kirkland? I would like to raise the issue with my EV specialist soon well before my car arrives, around May 12th. If I cannot avoid the sales tax, I may wait for the AWD version instead.

This is a great forum. I plan to post my first test drive impressions later this week after I get some "real" work done!

 

[ErickF]

I am new to the forum, but a long time lurker since I placed my order for a Pro AWD last October and upgraded to the FE in January as I was hoping to be able to negotiate a price below 45K to take advantage of the sales tax exemption. I am at step 4/7 and ordered from VW of Kirkland. Took a test drive yesterday and met the EV specialist, James Park. The price he quoted me was the MSRP + Destination of $45,190. They also add a dealer doc fee of $150. I have two questions:

1. What items are included in the 45K selling price for the sales tax exemption? Just MSRP and Destination? Or are items like the dealer fees and title and registration included?
2. ErickF, you said two dealers in the area adjusted the selling price for the FE to get below $45K, were either of those VW of Kirkland? I would like to raise the issue with my EV specialist soon well before my car arrives, around May 12th. If I cannot avoid the sales tax, I may wait for the AWD version instead.

This is a great forum. I plan to post my first test drive impressions later this week after I get some "real" work done!

Welcome to the forum! I'm in Bothell, so maybe we'll see each other around. I originally reserved at Kirkland, but switched to Campbell based on prior dealings.

As far as the buyers I've heard from, one was King VW in Bellingham, but I'm not sure of the other (hunch it wasn't Kirkland). It sounds like the simple adjustment of the selling price + destination charge was all that was necessary to come under the cap. It's a point-of-sale exemption, so the finance department should have it all figured out. I would reach out to the finance manager and ask directly how they are assisting customers there. There's lots of other areas around the deal that can be adjusted to make it work out.

From the RCW...it seems only destination charges (as "delivery charges") apply.

No deduction from the total amount of consideration is allowed for the following: (A) The seller's cost of the property sold; (B) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (C) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges; (D) delivery charges; and (E) installation charge

I pickup tomorrow from Campbell VW and will report how things work out there.

 

[xavalepdx]

I am new to the forum, but a long time lurker since I placed my order for a Pro AWD last October and upgraded to the FE in January as I was hoping to be able to negotiate a price below 45K to take advantage of the sales tax exemption. I am at step 4/7 and ordered from VW of Kirkland. Took a test drive yesterday and met the EV specialist, James Park. The price he quoted me was the MSRP + Destination of $45,190. They also add a dealer doc fee of $150. I have two questions:

1. What items are included in the 45K selling price for the sales tax exemption? Just MSRP and Destination? Or are items like the dealer fees and title and registration included?
2. ErickF, you said two dealers in the area adjusted the selling price for the FE to get below $45K, were either of those VW of Kirkland? I would like to raise the issue with my EV specialist soon well before my car arrives, around May 12th. If I cannot avoid the sales tax, I may wait for the AWD version instead.

This is a great forum. I plan to post my first test drive impressions later this week after I get some "real" work done!

Check the attachment. It has some examples from the dept. of revenue. Hope this helps.

 

[JingoRM]

Thanks ErickF and xvalepdx for the help. Based on my original reading of the DOR rule, I understood that destination/delivery is included. But it is not clear if dealer document fees are as well. They are not "necessary" for the sale, but always are included unfortunately! Perhaps, once you complete your purchase tomorrow ErickF you can let us know. Hopefully, all of the early adopters in the Seattle area can do a meet up later this year!

I will work with my dealership to get this adjusted and of course share the results with the forum.

Also, ErickF, how do you make that signature at the bottom of your messages with your ID4 information? Can I just cut and paste yours and then change the details?

 

[ErickF]

Thanks ErickF and xvalepdx for the help. Based on my original reading of the DOR rule, I understood that destination/delivery is included. But it is not clear if dealer document fees are as well. They are not "necessary" for the sale, but always are included unfortunately! Perhaps, once you complete your purchase tomorrow ErickF you can let us know. Hopefully, all of the early adopters in the Seattle area can do a meet up later this year!

I will work with my dealership to get this adjusted and of course share the results with the forum.

Also, ErickF, how do you make that signature at the bottom of your messages with your ID4 information? Can I just cut and paste yours and then change the details?

I'm looking forward to meet-ups. The general character of this forum has made the long wait quite fun.

You can update your signature by going to: Profile >Account Settings>Signature - copy/paste as you like!

BTW, are you in Snohomish County? If so, PUD has some nice rebates for you ($400 on the car, $500 on a connected charger).

 

[nigela]

As far as the buyers I've heard from, one was King VW in Bellingham,

Bellingham VW is Roger Jobs...was it actually the VW dealer in Bellingham?

 

[ChristophW]

Also, ErickF, how do you make that signature at the bottom of your messages with your ID4 information? Can I just cut and paste yours and then change the details?

Yes, that what I did with his signature. Then go to your account settings and find the signature menu item on the left.

 

[ErickF]

Bellingham VW is Roger Jobs...was it actually the VW dealer in Bellingham?

Was definitely Bellingham. My Google seach guessed wrong at the dealer, i presume.

 

[nigela]

Was definitely Bellingham. My Google seach guessed wrong at the dealer, i presume.

Thank you! I‘m buying from the dealer in Bellingham, it’s helpful to know that they know the drill.

 

[Salish.4]

OUCH! I had heard, but not verified, that in Washington State we would not pay sales tax on EV purchases. We have a gradient AWD on order and now I find that I will need to bring another $4,600 to the party. Makes me think pretty hard about the purchase. This bill was a product of the 2019 legislative session and I wonder what data they were using for the $45K cliff? Most of today's EVs were not in the in the market then, just Bolt, LEAF and Tesla. So much for VW being the people's car.

 

[Salish.4]

Bellingham VW is Roger Jobs...was it actually the VW dealer in Bellingham?

Roger sold the dealership and it is now Volkswagen of Bellingham.

 

[Salish.4]

OUCH! I had heard, but not verified, that in Washington State we would not pay sales tax on EV purchases. We have a gradient AWD on order and now I find that I will need to bring another $4,600 to the party. Makes me think pretty hard about the purchase. This bill was a product of the 2019 legislative session and I wonder what data they were using for the $45K cliff? Most of today's EVs were not in the in the market then, just Bolt, LEAF and Tesla. So much for VW being the people's car.

According to Car & Driver (date?) the average price for an EV is $55,600, I suppose all of the long range models being sold. How Much Is an Electric Car?

 

[JingoRM]

According to Car & Driver (date?) the average price for an EV is $55,600, I suppose all of the long range models being sold. How Much Is an Electric Car?

Hopefully you can try to negotiate the price to less than 45K so you will only pay taxes on the cost above $20,000 (that could save you about $2000). Before June 30, the state is exempting the first $25,000 of the purchase cost. I know the legislature did not want to subsidize "rich" people buying the $75,000 Model S, but you are right that $45K feels too low for the current market. Maybe some type of phase out for $45-55K cars.

I would argue that VW is making this a "peoples" car though with its pricing. No one else is making a BEV SUV for under 40K right now. (The Bolt EUV is more like a CUV).

Good luck with the purchase!

 

[ErickF]

Hopefully you can try to negotiate the price to less than 45K so you will only pay taxes on the cost above $20,000 (that could save you about $2000). Before June 30, the state is exempting the first $25,000 of the purchase cost. I know the legislature did not want to subsidize "rich" people buying the $75,000 Model S, but you are right that $45K feels too low for the current market. Maybe some type of phase out for $45-55K cars.

I would argue that VW is making this a "peoples" car though with its pricing. No one else is making a BEV SUV for under 40K right now. (The Bolt EUV is more like a CUV).

Good luck with the purchase!

One thing to note, the exemption is only the state part of the sales tax (not the county/city parts). I'm not aware of a county/city that is making the exemption - though that information would be challenging to find until the finance department figures it out at point of sale).

6.5% (state sales tax) + 0.3% (state vehicle lease/sales tax) = 6.8% ($1,700 tax savings)

 

[Salish.4]

WA state residents read this. Here is a message that I just sent to my state representatives. Consider sending one yourself.

My wife and I are finally ready to buy an electric vehicle. We have ordered the new VW ID.4. Because we live on a hill an all wheel drive is a necessity. I read the Dept. of Revenue FAQ on Clean alternative fuel and plug-in hybrid vehicles - sales/use tax exemptions to discover that the VW (the people's car) we are trying to buy will not quality for WA sales tax relief because the sales price exceeds the maximum price allowed. The bill was passed in 2019 when there weren't many true plug in EVs on the market. Car & Driver magazine quotes a study that claims the average price for a EV is $55,600. WA's threshold maximum is $45k. If the EV price is over $45k you get zero relief. It seems clear to me that the legislature and/or DOR need to rethink these limit amounts in light of todays EV vehicle prices and what the intent of the legislation is. As a limited income retiree that lack of relief is a real stumbling block for us. Thank you for your consideration.

 

[ErickF]

The sponsors of the "Clean Cars 2030" legislation (HB 1204 - 2021-22) might be good to include in correspondence. While they are working on long-range policy, adjustment of the existing exemption would reasonably accelerate adoption.

Washington State Legislature

app.leg.wa.gov

The original legislation was HB 2042 - 2019-20. It seems many of the sponsors are still in office.

Washington State Legislature

app.leg.wa.gov