WA State 2019 Sales Tax Exemption interpretation.

Discussion in 'General' started by Cypress, Sep 15, 2019.

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  1. Cypress

    Cypress Active Member

    PNW
    Have you seen anything that explains the language in the law related to the sales price that qualifies?

    http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Session Laws/House/2042-S2.SL.pdf

    The statute says the sales price plus value of any like trade in not exceeding $45,000. But I’m not sure what they mean but “plus trade in”.

    “a vehicle selling price plus trade-in property of like kind for purchased vehicles that:
    (I) For a vehicle that is a new vehicle at the time of the purchase date or the date the lease agreement was signed, does not exceed forty-five thousand dollars;”

    If for example the car is $45,000, and I trade in a car for $1, that the transaction no longer qualifies, because $45,001 I exceeds the threshold? Or does it mean if the price is $45,001, and I my trade in is $1, that it would qualify?

    Also, by “like kind” do they mean a clean energy/EV? So the purchase wouldn’t qualify if I trade in an EV, but would if I trade in an ICE?

    Found this on the DOL, but I don’t think their interpretation of the language of the law is correct, or complete. Any lawyers out there?

    “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 cannot receive the tax exemption. This is because even though the trade-in brought the cost of the vehicle 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.”

    https://www.dol.wa.gov/vehicleregistration/docs/faq-altfuleexemptions.pdf

    So what if the purchase price is $35,001, and the trade-in is $10,000? That would mean the sales price plus trade in value exceeded $45,000. Would it no longer qualify?

    What if if the trade in is not “of like kind” (for example an ICE and not an EV)? Would that mean the case above would now qualify?
     
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  3. Cypress

    Cypress Active Member

    PNW
    Also, could a dealership get around this by dropping the sales price of the car, but not giving you anything for the trade in? Or would the state consider the KBB of the trade-in?


    Sent from my iPhone using Inside EVs
     
  4. bwilson4web

    bwilson4web Well-Known Member Subscriber

    I think you have the basis for a good letter to your State representative, senators, and local tax and DMV departments. Polite but firm asking for a reading of your questions. For good measure, ask for an appointment to go over these issues. When 'face-to-face' enlightenment can occur. Then share with us.

    Bob Wilson
     
  5. DucRider

    DucRider Well-Known Member

    If in your example you mean the agreed upon price is $45,001, and they give you $10K on the trade, the "Sales Price" would be the $35,001 and it would not qualify( Sales Price + Trade Value > $45K)
    If you mean the agreed upon price is $35,001 and they give you $10K for your trade, the "Sales Price" would be $25,001 and it would qualify (Sales Price + Trade Value < $45K)

    "Like kind" is going to be most any motor vehicle, regardless of power train.
     

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