New 8% WA state tax on $100k+ vehicles, including leases

Off-Ramp
1

According to the WA State Dept of Revenue, an additional 8% tax will be applied to the sale of motor vehicles that exceeds $100k.

This will also apply to “fair market value of a leased vehicle that exceeds $100k”.

For leases of motor vehicles, the taxable amount is the fair market value of the vehicle at the beginning of the lease minus the current deduction amount of $100,000.

I don’t quite get what the second part of that sentence means. If the fair market value is $120k, you’d get taxed 8% on $20k? ($120k - $100k deduction amount?)

2

Yep, that’s my understanding

3

Because RTA isn’t enough.

7 Likes
4

Not as bad as I thought. I wonder if now we’ll see more Montana plates on nice cars in WA state. Plenty of those in CA.

5

Doug DeMuro did part of a podcast about that a few weeks ago. It seems like the scam/work around may be running it’s course.

Utah recently passed the most effective preventative measure. From what I understand, basically you get flagged if you have a Utah insurance policy for a vehicle with Montana plates.

People do the Montana work around to avoid sales tax but you can’t insure your car in Montana if it’s not garaged there unless you are ok with insurance denying your claim if you get in an accident.

Interestingly, in Virginia out of state registration to avoid the high car tax is very popular but I almost never see Montana plates. Probably because that would be too obvious and immediately get you flagged as a tax cheat.