Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction.
This rule provides information about the requirements for
retail sales and use tax exemptions for clean alternative fuel vehicles that
were in effect from January 1, 2009, through July 1, 2015. For information on
available exemptions after July 1, 2015, refer to
RCW
82.08.809,
82.08.9999,
or dor.wa. gov.
(2)
Exemption periods. The exemption periods provided for clean
alternative fuel vehicles and high gas mileage vehicles differ.
(a)
Clean alternative fuel
vehicles.(i)
New
vehicles. The exemptions provided for new passenger cars, light duty
trucks, and medium duty passenger vehicles that are exclusively powered by a
clean alternative fuel apply to purchases made from January 1, 2009, through
July 1, 2015.
(ii)
Used
vehicles. The exemptions provided for qualifying used passenger cars,
light duty trucks, and medium duty passenger vehicles, which were modified
after their initial purchase, with an EPA certified conversion to be
exclusively powered by a clean alternative fuel apply to purchases made from
July 12, 2010, through July 1, 2015.
(iii)
Use of previously exempt vehicles
on or after July 1, 2015. Use tax does not apply to the use, on or after
July 1, 2015, of a vehicle if:
* The person used the vehicle in this state before July 1,
2015; and
* The use prior to July 1, 2015, was exempt from use tax as
described in (a)(i) or (ii) of this subsection.
(b)
High gas mileage vehicles.
The exemptions provided for new passenger cars, light duty trucks, and medium
duty passenger vehicles that utilize hybrid technology and have a United States
Environmental Protection Agency estimated highway gasoline mileage rating of at
least forty miles per gallon apply as follows:
(i)
January 1, 2009, through July 31,
2009. The exemptions apply to all retail sales and use taxes.
(ii)
August 1, 2009, through December
31, 2010. The exemption is limited to the 0.3 percent retail sales tax
imposed by
RCW
82.08.020(3) on retail sales
of motor vehicles.
(3)
Definitions. The following
definitions apply throughout this section:
(a)
"Clean alternative fuel" means natural gas, propane, hydrogen, or electricity,
when used as a fuel in a motor vehicle that meets the California motor vehicle
emission standards in Title 13 of the California code of regulations, effective
January 1, 2005, and the rules of the Washington state department of ecology.
See
RCW
82.08.809(3) and 82.12.
809(2).
(b) "Gross vehicle weight
rating" is the value specified by the manufacturer as the maximum design loaded
weight of a single vehicle. See WAC
173-423-040(4).
(c) "Hybrid technology" means propulsion
units powered by both electricity and gasoline. See RCW 82.08.813(3) and
82.12.813(2).
(d) "Light duty
truck" is any vehicle certified to the standards in Title 13, CCR, section 1961
(a)(1) rated at eight thousand five hundred pounds gross vehicle weight or
less, and any other motor vehicle rated at six thousand pounds gross vehicle
weight or less, which is designed primarily for the purposes of transportation
of property or is a derivative of such vehicle, or is available with special
features enabling off-street or off-highway operation and use. See WAC
173-423-040(8).
(e) "Medium duty passenger vehicle" is any
medium duty vehicle with a gross vehicle weight rating of less than ten
thousand pounds that is designed primarily for the transportation of persons.
The medium duty passenger vehicle definition does not include any vehicle
which:
(i) Is an "incomplete truck," i.e., is
a truck that does not have the primary load carrying device or container
attached; or
(ii) Has a seating
capacity of more than twelve persons; or
(iii) Is designed for more than nine persons
in seating rearward of the driver's seat; or
(iv) Is equipped with an open cargo area of
seventy-two inches in interior length or more. A covered box not readily
accessible from the passenger compartment will be considered an open cargo area
for the purpose of this definition. See WAC
173-423-040(9).
(f) "Medium duty vehicle" is a
vehicle with a gross vehicle weight rating of eight thousand five hundred one
to fourteen thousand pounds. See WAC
173-423-100(2).
(g) "Model year" is the manufacturer's annual
production period which includes January 1 of a calendar year. If the
manufacturer has no annual production period, "model year" is the calendar
year. In the case of any vehicle manufactured in two or more stages, the time
of manufacture shall be the date of completion of the chassis. See WAC
173-423-040(10).
(h) "New motor vehicle" is any motor vehicle
that:
* Is self-propelled;
* Is required to be registered and titled under Title 46
RCW;
* Has not been previously titled to a retail purchaser or
lessee; and
* Is not a vehicle which has been sold, bargained, exchanged,
given away, or title transferred from the person who first took title to it
from the manufacturer or first importer, dealer, or agent of the manufacturer
or importer, and so used as to have become what is commonly known as
"secondhand" within the ordinary meaning thereof. See
RCW
46.70.011 and
46.04.660.
The model year of the vehicle is not determinative of whether
it meets the definition of "new motor vehicle."
(i) "Passenger car" means every motor vehicle
except motorcycles and motor-driven cycles designed primarily for
transportation of persons and having a design capacity of twelve persons or
less. See WAC
173-423-040(13)
and
RCW
46.04.382.
(j) "Qualifying used passenger cars, light
duty trucks, and medium duty passenger vehicles" means vehicles that:
* Are part of a fleet of at least five vehicles, all owned by
the same person;
* Have an odometer reading of less than thirty thousand
miles;
* Are less than two years past their original date of
manufacture; and
* Are being sold for the first time after modification.
(4)
New passenger
cars, light duty trucks, and medium duty passenger vehicles. In order to
qualify for the exemptions, the vehicle must meet the definition of "passenger
car," "light duty truck," or "medium duty passenger vehicle" in addition to
meeting the definition of "new motor vehicle."
(5)
Purchases of previously owned clean
alternative fuel or high gas mileage vehicles. The exemptions do not
apply to purchases of used vehicles unless they are qualifying used passenger
cars, light duty vehicles, or medium passenger vehicles, which were modified
after their initial purchase, with an EPA certified conversion to be
exclusively powered by clean alternative fuel.
(a)
Example 1. Mike purchases a
used 2009 model year hybrid vehicle from a dealer or private
party in July 2011. The purchase would not qualify for the exemptions. The
exemption for vehicles using hybrid technology only applies to new
vehicles.
(b)
Example
2. Nicole purchases a new 2008 model year hybrid
vehicle in July 2009 from a dealer. This purchase would be exempt (assuming it
meets the other requirements). A new vehicle could be any model year as long as
it has not been previously titled to a retail purchaser or lessee.
(c)
Example 3. Joe purchases a
new 2009 model year hybrid vehicle on August 5, 2009, from a
dealer. This purchase is not exempt from all retail sales taxes but, assuming
it meets the other requirements, is exempt from the 0.3 percent retail sales
tax on retail sales of motor vehicles.
(6)
Conversions. For purposes of
this section, a conversion refers to the alteration of an otherwise
nonqualifying vehicle exclusively powered by gasoline or diesel into a
qualifying vehicle that either:
(a) Is
exclusively powered by clean alternative fuel; or
(b) Utilizes hybrid technology and has a
United States environmental protection agency estimated highway gasoline
mileage rating of at least forty miles per gallon.
(i)
Purchases of converted
vehicles. The purchase of a new vehicle, or a used vehicle satisfying
the requirements described in subsection (2)(a)(ii) of this section, that is
converted prior to or as part of the retail sale to the purchaser and that
otherwise satisfies the requirements of the exemptions will qualify for the
exemptions. If the conversion is performed after the retail sale, the purchase
of the vehicle will not qualify for the exemptions.
(ii)
Purchases of the service of
converting vehicles. While the purchase of a new vehicle converted by
the seller prior to or as part of the retail sale to the purchaser qualifies
for the exemptions as described in subsection (6)(a) of this section, the
purchase of the service of converting a vehicle does not qualify for the
exemptions. However, if the seller hires a third party to convert the vehicle,
it can give the third party a resale certificate (WAC
458-20-102A )
for work completed before January 1, 2010, or a reseller permit (WAC
458-20-102 ) for
work completed on or after January 1, 2010. Even though resale certificates are
no longer used after December 31, 2009, they must be kept on file by the seller
for five years from the date of last use or December 31, 2014.
(A)
Example 1. Tom wants to
purchase a new nonqualifying vehicle from Dealer but have it converted as a
part of the purchase transaction. Dealer hires John's Shop to convert the
vehicle for Tom, and Tom purchases the converted vehicle from Dealer. Tom's
purchase of the converted vehicle qualifies for the exemptions.
(B)
Example 2. Tom purchases a
new nonqualifying vehicle from Dealer. Tom then hires John's Shop to convert
the vehicle. The purchase of the nonqualifying vehicle does not qualify for the
exemptions, even if Dealer delivers the vehicle directly to John's Shop on
Tom's behalf for conversion.
(7)
Use tax. The use of a
qualifying vehicle by the original title holder is exempt from use tax if the
vehicle is purchased during the applicable exemption period specified in
subsection (2) of this section.
(a)
Example 1. Will, a Washington resident, purchases a new qualifying
clean alternative fuel vehicle in Oregon from Dealer on February 1, 2009, and
returns to Washington in the vehicle on February 2, 2009. Will's use of the
vehicle in Washington is exempt from use tax.
(b)
Example 2. Oliver, an Oregon
resident, purchases a new qualifying hybrid vehicle from Dealer in Oregon on
April 1, 2009. Oliver moves to Washington on May 15, 2009. Oliver's use of the
vehicle in Washington is exempt from use tax. Note: In the absence of the
exemptions discussed in this section, Oliver's purchase would be subject to use
tax since his first use of the vehicle in Washington occurred within 90 days of
his acquisition and use of the vehicle in another state. See
RCW
82.12.0251.
(8)
Extended warranties and maintenance
agreements. The sale of an extended warranty or maintenance agreement is
subject to retail sales tax even though the vehicle itself may qualify for the
exemptions. See WAC
458-20-257.
(9)
Replacement parts and/or repair
services. The sale of replacement parts or repair services is subject to
retail sales tax even though the vehicle itself may have qualified for the
exemptions. Only the purchase and use of a qualifying vehicle is exempt from
retail sales and use taxes.
(10)
Accessories. A qualifying vehicle includes all accessories
installed or sold as part of the sale of the vehicle.
(a)
Example 1. A dealership
installs a ski rack and applies pinstriping on an otherwise qualifying vehicle
on January 5, 2009, before a customer purchases the vehicle. Any separate,
itemized charges for the accessories listed on the vehicle sales invoice are
exempt from retail sales tax.
(b)
Example 2. On January 5, 2009, a customer purchases an otherwise
qualifying vehicle, and as a condition of the purchase requires that the seller
install stereo speakers and apply paint sealant. The seller does not have the
accessories in stock, but the customer takes delivery of the vehicle. The
customer then brings the vehicle back to the seller, and the accessories are
installed and applied on January 12, 2009. Any separate, itemized charges for
the accessories listed on the vehicle sales invoice are exempt from retail
sales tax.
(11)
Leases. A vehicle is exempt from retail sales and use taxes on a
lease if the other requirements are met. If the vehicle is new, registered, and
titled in the lessee's name during the applicable exemption period specified in
subsection (2) of this section, the retail sales tax exemption will apply only
to amounts due during the exemption period. See also WAC
458-20-103
and
458-20-235.
(a)
Example 1. Alex leases a new
hybrid vehicle that he registers and titles on December 8, 2008. None of his
lease payments will qualify for the exemptions because the vehicle was
registered and titled prior to January 1, 2009.
(b)
Example 2. Beth leases a new
clean alternative fuel vehicle that she registers and titles on December 8,
2010. Assuming that the other requirements of the exemptions are met, any
amounts due under the lease before January 1, 2011, are exempt from retail
sales tax.
(12)
Payments made prior to January 1, 2009. Any payment made toward
the purchase of an otherwise qualifying vehicle prior to the effective date of
the exemptions, January 1, 2009, qualifies for the exemptions if:
(a) The vehicle sold is titled and registered
on or after January 1, 2009, but before the applicable exemption expires;
and
(b) The purchaser takes
possession of the vehicle on or after January 1, 2009, but before the
applicable exemption expires. See WAC
458-20-103,
458-20-197,
and
458-20-235.
Example. Greg makes a down payment toward the
purchase of a new qualifying hybrid vehicle on November 7, 2008, but does not
actually take possession of the vehicle at the dealership lot until January 2,
2009. The vehicle is titled and registered on January 9, 2009. The purchase of
the vehicle is exempt from all retail sales taxes.
(13)
Payments made prior to the
expiration date of the applicable exemption. Any payment made toward the
purchase of an otherwise qualifying vehicle prior to the expiration date of the
applicable exemption does not qualify for the exemption if:
(a) The vehicle sold is titled or registered
on or after the expiration date of the exemption; or
(b) The purchaser takes possession of the
vehicle on or after the expiration date of the exemption. See WAC
458-20-103,
458-20-197,
and
458-20-235.
Example. Craig makes a down payment toward the
purchase of a new qualifying clean alternative fuel vehicle on November 7,
2010, but does not actually take possession of the vehicle at the dealership
lot until January 2, 2011. The vehicle is titled and registered on January 11,
2011. The purchase of the vehicle is subject to retail sales tax and the 0.3
percent retail sales tax imposed by
RCW
82.08.020(3) on retail sales
of motor vehicles.
Statutory Authority:
RCW
82.32.300 and 82.01.60 [82.01.060].
10-17-069, § 458-20-279, filed 8/13/10, effective 9/13/10. Statutory
Authority:
RCW
82.32.300 and
82.01.060(2).
09-02-051, § 458-20-279, filed 12/31/08, effective
1/31/09.