Important D.C. Vehicle Excise Tax Changes Now in Effect

As of February 1, the vehicle excise tax structure in the District of Columbia has changed somewhat, in order to comply with the CleanEnergy DC Omnibus Amendment Act of 2018, which took effect at the beginning of the month.

Under the new guidelines, only fully electric vehicles are exempt from the excise tax as applied to new-car purchases, and vehicles are taxed on gradual scale that incorporates both unladen weight and city miles-per-gallon. For the first time, vehicles with a city mpg of 40 mph are covered by an excise tax rate between 1 and 3 percent, depending on the weight of the vehicle.

Please click here to view a full list of other types of vehicle sales and transfers that are exempt from excise tax levies. Also, please note that the city has produced a helpful excise tax calculator, which helps dealers determine the excise tax rates of specific vehicles, by providing the vehicle’s VIN. The city’s excise tax rates are “applied to the fair market value (as defined by the current National Automobile Dealers Association (NADA) Business Guide for the Eastern Region) of the vehicle at the time of application,” terms that are reflected in the tax calculator.

In addition, the DC DMV now allows eligible D.C. customers to claim their D.C. Earned Income Tax Credit when titling their vehicles in the District. For District residents wishing to claim the EITC in this process, “documentation from the Office of Tax and Revenue will be required prior to vehicle titling.” The responsibility is on the vehicle buyer to provide this information.