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WA HB2042 and Model 3 LR $2500 rebate

deonb

Active Member
Mar 4, 2013
4,061
4,361
Redmond, WA
HB2042 supposedly went into effect August 1 and provide a $2500 rebate (or sales tax break) if:

"Have at the time of sale a lowest manufacturer's suggested retail price of forty-two thousand five hundred dollars or less, as determined by the department of licensing, for the base model;"

What is the base model price of the Model 3 LR for the purpose of this clause? Is it $38990 or $47990?


Did anybody actually receive this yet? (Did this bill actually go into effect on August 1 as was planned?). Is it taken care of by Tesla on delivery?
 
Last edited:

acarney

Active Member
Jul 9, 2019
2,889
1,882
Richland, WA
There's a lot of back and forth over this. The bill has been updated but I believe if you read it the bill vaguely mentions "selling price" or something. The last word that was going around was about if the destination fee was included in the $45,000 cap or not. It's pretty clear that the SR+ is the highest Model 3 that qualifies for the "up to" $2,500 back. You should be able to get a fully loaded SR+; red paint, white interior, 19s. However, you wouldn't be able to get FSD added during the order process, so if you want that best take delivery before the post-delivery upgrade cost goes up. WA State Licensing (DOL) Official Site: Alternative Fuel Vehicles and Plug-In Hybrids Washington State Tax Exemptions

This should be a point of sale exemption, meaning that Tesla will recalculate the tax and just show the tax due as the reduced amount. If you get it financed via a 3rd party they'll certainly catch it in their underwriting process and stop to verify that Tesla didn't screw something up by not charging you the full tax. Be ready, or tell them ahead of time, about this sales tax exemption and how Tesla accounts for it.

It will reduce your sales tax by exempting the first $25,000 of a vehicle sale from sales tax (if purchased before Jul. 31, 2021). That this means is if the car is $40,000 and you live in an area that pays 8.9% tax on vehicles then.... $40,000 - $25,000 = $15,000. You will owe tax on $15,000 of the sale, or 15,000 * 0.089 = $1,335 in tax. In this case the exemption is good for about $2,225 ($25,000 * 0.089).

That's how much I got off my Model 3 SR+. My area pays a total of 8.9% on vehicle sales and my car was under $45,000.
 
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I found this at : Washington State Legislature

How it used to be:
An alternative fuel vehicle retail sales and use tax exemption was in place between January 2009 and the end of May 2018. It was modified in law several times. The most recent version in place, enacted in 2016, was a retail sales and use tax exemption for new passenger cars, light duty trucks, and medium duty passenger vehicles that: (1) had a base model Manufacturer's Suggested Retail Price (MSRP) of $42,500 or less; and (2) were either exclusively powered by a clean alternative fuel, or used at least one method of propulsion that was capable of being reenergized by an external source of electricity and were capable of traveling at least 30 miles using only battery power. Both purchased and leased vehicles were eligible. Tax exemption eligibility was capped at $32,000 per eligible vehicle.

How it is now:
The alternative fuel vehicle retail sales and use tax exemption is reinstated using the same vehicle qualification criteria in place between July 1, 2016, and May 31, 2018, except that the qualification requirement related to price for new vehicles is changed to only permit vehicles with a sales price (including any trade-in value) or fair market value of $45,000 or less.
For new vehicles purchased or leased between August 1, 2019, and July 31, 2021, the maximum amount eligible for the tax exemption is $25,000; for vehicles purchased or leased between August 1, 2021, and July 31, 2023, the maximum amount eligible for the tax exemption is $20,000; and for vehicles purchased or leased between August 1, 2023, and July 31, 2025, the maximum amount eligible for the tax exemption is $15,000. For used vehicles, the maximum amount eligible for the tax exemption is $16,000 from August 1, 2019, to July 31, 2025. The seller must keep records necessary for the DOR to verify eligibility, and a person claiming the exemption must also submit certain specified information to the DOR.

So it doesn't matter what the base model price is now, only the actual sale price on your invoice.
 

deonb

Active Member
Mar 4, 2013
4,061
4,361
Redmond, WA
Ahh, I see the bill got changed before it was passed.

Any chance of getting a software locked SR AWD or alternatively a LR AWD without AutoPilot that comes in under the cap that we can then immediately add back after purchase?

I remember Tesla created a similar pricing structure in California a few years ago to get in under some or other cap.
 

acarney

Active Member
Jul 9, 2019
2,889
1,882
Richland, WA
Ahh, I see the bill got changed before it was passed.

Any chance of getting a software locked SR AWD or alternatively a LR AWD without AutoPilot that comes in under the cap that we can then immediately add back after purchase?

I remember Tesla created a similar pricing structure in California a few years ago to get in under some or other cap.

I specifically asked about them removing AP with this in mind. Tesla said that they don’t have the option to remove AP anymore on any orders. I also think the destination fee might screw you over...

If someone has solid proof of getting this done, invoice from Tesla & approved tax exemption, etc please share because I’ll be extremely furious and go to the state/Tesla to see what can be done.

I called Tesla more then a couple times about this. I called Washington state department of licensing about this. I called Washington state department of revenue about this. Every one of them told me they weren’t sure, put me on hold for 15 to 40 minutes, and then told me they were certain it was a “no” and destination fee counted and Tesla refused (said impossible) to remove AP.

Otherwise I would have JUST been able to afford the LR Model 3, which I REALLY wanted for the AWD, faster supercharging, and range.
 
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acarney

Active Member
Jul 9, 2019
2,889
1,882
Richland, WA
But you did get the $3750 federal tax credit, or will when you do your 2019 tax return. People buying Teslas now get no federal credit, but can get this state sales tax reduction.

Yep, I still beat him a little bit, but when I took delivery of my car in August I got ~$2250 sales tax exemption and $1875 fed credit, so a total of $4,125. So he missed out on like $375 at most...
 

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