2026 WA State Motor Vehicle Tax Increase

Starting January 1st, 2026, Washington state is enacting several tax increases. The law introduces a new “luxury vehicle” tax: for any non-commercial motor vehicle (cars, light trucks, SUVs, etc.) whose sale or lease price exceeds $100,000, there will be an additional 8% tax applied only to the portion of the price above $100,000. (The first $100,000 is exempt, and that deductible threshold will increase by 2 % at the start of each fiscal year.)  

Important for buyers: the “luxury tax” applies before accounting for trade-in value — meaning you cannot subtract the value of any trade-in when calculating whether the sale price crosses the $100,000 threshold.

That means if you or someone you know is considering a new BMW priced at $100,000 or more, now is the time to act! Beat the tax increase and save thousands by purchasing before the new law takes effect.

For more details, please see a Client Advisor.