How is the MVET car tab tax calculated?
The Motor Vehicle Excise Tax (MVET) is a RTA tax charged upon purchase or annual renewal of a new or used car. It is calculated from the depreciated value of your vehicle by using a formula based on the vehicle manufacturer’s suggested retail price (MSRP), or purchase price for commercial trucks and commercial trailers, and a depreciation schedule based on the age of the vehicle. The depreciation schedule, set by state law, has been in place since 1999.
Our legal commitments to bondholders require the continued use of this depreciation schedule until those bonds mature. The Washington State Constitution requires honoring commitments to bondholders. In 2006, the Washington State Legislature adopted a new depreciation schedule. This new schedule is more favorable to newer cars in their first ten years of life, and less favorable to older cars. This newer schedule will go into effect after the 1999 bonds are retired in 2028. Also in 2028, the original 0.3 MVET that voters approved in 1996 will expire, reducing the MVET tax from 1.1 percent to 0.8 percent.
Contact the Department of Licensing (DOL) with questions about the RTA MVET, such as types of vehicles subject to the tax.
Why is vehicle value based on MSRP and not on Kelley Blue Book?
The DOL's method of calculating the tax based on MSRP ensures that owners of the same type of vehicle pay the same amount of tax. There is no mechanism in law to account for ranges of market value that the Kelley Blue Book attempts to estimate based on age, mileage, features and actual condition of vehicles. Considering these factors would require a costly and burdensome system for vehicle inspections.
I lived in the RTA when I renewed and paid the RTA tax. Now that I've moved, can I get a refund?
The RTA tax is assessed at the time of renewal using the vehicle's address of record and is not pro-rated or refundable. Please make sure your address is updated with Department of Licensing (DOL) in accordance with state laws each time you move.
I received a Shortage letter. What is it?
Sometimes the MVET tax is not collected at purchase or renewal. If that happens you will receive a shortage letter from the Department of Licensing (DOL) that includes information about how to pay the shortage bill. The RTA tax must be paid before you can renew your car tabs.