Tax on EV Rebates in DC or Other States

Ask the Hackrs Buy/Finance
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1

I plan to lease a 2025 Kia EV9 at a dealership in Kentucky (KY), but I am registering the vehicle in Washington DC. I was wondering if the current aggressive EV rebates (aka $13,000 lease cash rebate incentive) are taxed.

When I was looking at 2025 Tucson PHEVs, one dealership mentioned that the $3500 rebate should not be taxed. I wondered if the same is true for these high EV lease cash rebate incentives.

Does it depend on where the car is being registered? Should I make sure the dealership does not incorrectly tax the rebate?

2

Hi there. Fellow DC resident. Rebates are taxed based on where the car is registered. DC does tax rebates.

The onus should be on the dealer to determine what the tax rate is and how to correctly tax it. If they are not sure, time to move on IMO.

3

Hello fellow DC resident. Actually the dealership replied back and confirmed that REBATES are NOT taxed, and I assume for registering in DC. There is the 10.25% DC sales tax on the monthly lease.