Washington State EV Sales Tax Exemption - Bill Introduced

[pilot279]

I noticed the Washington State legislature introduced an EV sales tax exemption bill similar to the one that expired last year on 1/17/2019. It applies to a car with a base value of $45,000 or less. This is good news if it can be re-established. Call your representatives!

Bill: SB 5336
Washington State Legislature

 

[GDP1]

Yes, I noticed that! So if this moves through, when would it come into effect? I believe this year's session is 105 days, then if it passes takes another 90 days to come into law. That puts it in law around June? (I have no clue how this works - just speculating. Shows how much I know about our local legislature). I know there's a big push for it around the Transportation plan but not sure if this bill will get cut.

Here's what I was thinking
If I took delivery of the base SR, say, this quarter, I'd qualify for the federal tax credit ($3,750), but would still pay sales tax. But, I'm thinking of holding out for the sales tax rebate and then still get another $1,875 in federal tax credit. Of course if it doesn't pass, well that would suck, but I'm not fully committed at this point. The sales tax is a huge incentive.

Maybe I'm thinking about this wrong?

 

[pilot279]

I have been following it this month to see what happens. From what I can tell, they recently modified it from a full sales tax exemption off of $45,000 to just $1000 per EV (base price $45,000 or lower). This could change as it continues through the legislature (up or down or not at all).

I bit the bullet last night and ordered my car. If the bill has a high likelihood of passing once I get my car assigned, I will ask to postpone the delivery to get the sales tax exemption.

Also, you need to consider that Tesla may raise the price of some of their models. They did that with the MR which was originally $45,000 when it was released in October and they raised it to $46,000 a few days (or a week) later until Jan 2019.

I think you are probably better off getting the $3,750 rebate than waiting. We don't know how the delivery schedule will go at this point, so you could also find yourself unable to get the car before the end of June.

 

[ChrisH]

Lol the selfish part of me assumes this will pass and I will have been even more unlucky having purchased a RWD LR in August of last year (after the old sales tax credit but before the crazy price drops).

 

[Big-T]

Yeah I'm curious about how this will go down too...but is there any chance this would go into law before June 30th? I mean even best case scenario? Otherwise the $3,750 federal credit would be preferable, now that the 35k version has dropped this is likely the cheapest it's going to get....

 

[GDP1]

From what I can tell, they recently modified it from a full sales tax exemption off of $45,000 to just $1000 per EV

I read that too...but when I tried to skim through it, I thought that might've applied to used cars. New ones were tax exempt. (Honestly, it was hard for me to follow all of the sub-bullets/indentations.)

 

[GDP1]

I read that too...but when I tried to skim through it, I thought that might've applied to used cars. New ones were tax exempt. (Honestly, it was hard for me to follow all of the sub-bullets/indentations.)

Oops nevermind...i was reading a bill substitute that had some funky additions. Looks like the 1k is right. Seems like ordering now is the better option...

 

[Big-T]

Yeah i know what you mean I found it a little confusing as well - so you also agree that it looks like you get a 1k tax discount? So (for example), if your 40k car had the 10% Seattle tax, it would normaly be 4k in taxes but reduced to 3k if this bill passes?

 

[pilot279]

That's how I understand it. Does anyone know how long it takes for a bill become law after the governor signs?

 

[Big-T]

I think this is tied to the 2019-2021 budget, so it would likely go into effect in July with the other budget items - I don't know if it would apply retroactively or not.

 

[AndyMc]

I have also been waiting on the SR model and now that it is finally available been tracking the Legislature to try to time the purchase. I am definitely not an expert reading the bills but unfortunately I think the sales tax break is going to be after June 30th which means it won't be available until after the Federal Tax Credit gets cut in half again.

Here is text I found at the top of page five of the latest version of the bill which was recommended this week to be passed by the Senate Transportation Committee. It is called the second substitute bill.

(e) "Qualification period start date" means the first day of the first calendar month after June 2019 that is at least sixty days after the effective date of this section.

http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Senate Bills/5336-S2.pdf#page=1

I think that clearly means it cannot start until after July 1st and could be later as there has to be at least sixy days after the bill becomes effective.

Page 2 has a line that clearly says the sales tax break becomes available after the qualification period start date.

(1) Beginning with sales made or lease agreements signed on or after the qualification period start date:

At this point it looks like it is still capped at $1000 which is less than the drop in Federal Tax Credit so it looks like taking delivery prior to June 30th will be better for anyone who will qualify for the entire $3750 Federal Tax Credit.

Of course there is always the possibility that the Federal Tax Credit gets changed (removed or restored) but the last I saw, any attempts at change have not made any progress.

 

[pilot279]

I have also been waiting on the SR model and now that it is finally available been tracking the Legislature to try to time the purchase. I am definitely not an expert reading the bills but unfortunately I think the sales tax break is going to be after June 30th which means it won't be available until after the Federal Tax Credit gets cut in half again.

Here is text I found at the top of page five of the latest version of the bill which was recommended this week to be passed by the Senate Transportation Committee. It is called the second substitute bill.

(e) "Qualification period start date" means the first day of the first calendar month after June 2019 that is at least sixty days after the effective date of this section.

http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Senate Bills/5336-S2.pdf#page=1

I think that clearly means it cannot start until after July 1st and could be later as there has to be at least sixy days after the bill becomes effective.

Page 2 has a line that clearly says the sales tax break becomes available after the qualification period start date.

(1) Beginning with sales made or lease agreements signed on or after the qualification period start date:

At this point it looks like it is still capped at $1000 which is less than the drop in Federal Tax Credit so it looks like taking delivery prior to June 30th will be better for anyone who will qualify for the entire $3750 Federal Tax Credit.

Of course there is always the possibility that the Federal Tax Credit gets changed (removed or restored) but the last I saw, any attempts at change have not made any progress.

Thanks for the details on when it would go into effect. Now with the price increases coming it makes waiting for the tax savings a moot point.

 

[GDP1]

Of course there is always the possibility that the Federal Tax Credit gets changed (removed or restored) but the last I saw, any attempts at change have not made any progress.

When you say "removed", what does that mean? So, if I purchased an M3 and took delivery , say, June 1st...expecting $3,750 credit. But then "they" can repeal/remove this and when it comes time to file taxes in 2020, we could come to find out that our credit is no longer valid?

Is that possible?

 

[AndyMc]

If the credit is still law when you take delivery then I don't think they can take it away. If any of the repeal proposals actually got passed then I am guessing it would be tied to a specific future date.

Now that there is a new proposal for the Federal Credit to become $7,000 and extend to 600,000 cars per manufacturer, it would be interesting if it passes to see if it would retroactively be applied to those who purchased a Tesla this year.

So in short I think if you have already taken delivery this year you will be guaranteed at least the $3750 credit with a small chance for more if the new extension proposal passes.

 

[pilot279]

It looks like the sales tax exemption goes into effect on 8/1/19. The maximum benefit for a new EV under $45,000 is $2,500.

Washington State reinstates its electric vehicle tax incentive, report says - Roadshow

 

[ChrisH]

It looks like the sales tax exemption goes into effect on 8/1/19. The maximum benefit for a new EV under $45,000 is $2,500.

Washington State reinstates its electric vehicle tax incentive, report says - Roadshow

Sure would have been nice to get $2500 off last summer. WA legislature fail to keep this going last year.

 

[Leafdriver333]

WA state EV tax exempt law making is similar to Elon's price changes.
They both sort of compensate for decreasing federal EV tax credit.
So I am not too disappointed I won't benefit from it.

 

[ralph142]

It annoying that it’s so arbitrary, one year on, the next off, some fixed $ limit, maybe not, etc.

 

[Yeab Wondimu]

Made the decision to buy a M3 today. Does anyone know if I need to wait until after August 1st to order the car to get the state tax credit or can I order it before and just take delivery after August 1?

 

[ChrisH]

Made the decision to buy a M3 today. Does anyone know if I need to wait until after August 1st to order the car to get the state tax credit or can I order it before and just take delivery after August 1?

As long as you pay after August 1st you should be good but it’s only taking about two weeks for delivery these days. I probably would just order aug 1st