Effective January 1, 2023, California has enacted a sales and use tax exemption for qualified motor vehicles (including designated hybrid and zero-emission vehicles) sold to qualified buyers. Per the enacted legislation:
The Clean Cars 4 All Program is an equity-based program that increases access to, and adoption of, zero-emission and hybrid vehicles in low-income and disadvantaged communities. The program provides incentives to lower-income residents to scrap their old vehicles and purchase or lease new or used hybrid, plug-in hybrid, zero emission replacement vehicles, or alternative mobility options. The program was established to reduce greenhouse gas emissions, improve air quality, and benefit low-income state residents through the replacement of high-polluter motor vehicles with cleaner and more efficient motor vehicles or a mobility option.
The exemption does not apply to any tax levied by a county, city or district under the Bradley-Burns Uniform Local Sales and Use Tax Law or the Transactions and Use Tax Law. The exemption has a sunset date of January 1, 2028. (S.B. 1382, Laws 2022)