Ride Share Vehicles in Washington Exempt from Sales Tax

Beginning September 1, 2021, vehicles purchased for certain ride-share programs will qualify for sales and use tax exemption. At least one of the following conditions must be met:

• The vehicle must be operated by a public transportation agency for the benefit of the general public.
• The vehicle must be used by a major employer as part of its commute trip reduction program.
• The vehicle must be owned and operated by individual employees and registered either with the employer as part of its trip reduction program or with a public transportation agency.

To qualify for the exemption, the passenger motor vehicle must:

• Have seating capacity of three or more, including the driver, when operated by a public transportation agency.
• Be used for ride sharing to transport at least five passengers when operated by any ride-sharing operator other than a public transportation agency.
• Be used for ride sharing for 36 consecutive months beginning from the date of purchase.
• Be operated in the state’s eight largest counties required to develop commute trip reduction plans, other counties or cities within those counties choosing to adopt a commute trip reduction plan, or a county where the vehicle is registered or operated by a public transportation agency.

Buyers purchasing vehicles qualifying for the exemption will be required to provide an exemption certificate declaring the purpose and intent of the vehicle. A buyer as a business must report it on the Buyes’s Sales and Use Tax Preference Addendum within MyDOR. Ride-share operators for persons with special transportation needs are exempt from Business & Occupation (B&O) tax and Public Utility Tax (PUT). When filing excise tax returns, ride-share operators may claim the Qualified Ride-sharing Services deduction from either classification.

Sellers may report the sale on the excise tax return claiming the Sales of Qualified Ride-sharing Vehicles deduction from retail sales tax.

Special Notice, Washington Department of Revenue, August 19, 2021