A little-known provision in HB2711 offers Washington motor vehicle dealers a second chance to correct luxury vehicle tax collection errors—but only if they act by September 30, 2027.
Most Washington retail motor vehicle dealers don't realize that buried in HB2711—a transportation bill—is a provision that could save them thousands in penalties and interest if they missed collecting the state's 8% luxury vehicle tax on high-end sales.
Here's what happened: Washington imposes an 8% tax on the sale or lease of vehicles priced over $100,000. Between January 1, 2026 and June 30, 2026, some dealers failed to collect this tax from customers. If that's your dealership, state law now offers a path to resolve the mistake without the usual financial penalties.
This provision applies to motor vehicle dealers of any size—from independent used-car lots to larger operations—that sold or leased vehicles over $100,000 during the first half of 2026 and didn't collect the required 8% luxury vehicle tax.
Under Section 203 of HB2711 (a new section added to chapter 82.32 RCW), dealers can have all penalties and interest waived if they meet four conditions:
The key benefit: you only owe the tax itself, not the penalties and interest that would normally accrue on unpaid taxes.
The waiver provision covers tax reporting periods through June 30, 2026. However, to qualify for the waiver, you must submit your amended return and waiver application by September 30, 2027. Miss that date, and you lose the opportunity.
If you're uncertain whether you collected the tax correctly on high-end vehicle sales in early 2026, now is the time to review your records. The difference between filing under this waiver provision and waiting to be audited could be substantial—potentially thousands of dollars in avoided penalties and interest.
The provision assumes good-faith errors, not intentional evasion. If your dealership has a clean compliance record and meets the conditions above, the state is essentially offering a reset button for this specific tax collection period.
One practical note: entering a payment plan counts as satisfying the requirement to "pay in full," so cash flow constraints don't disqualify you from the waiver.
For dealers with questions about whether they qualify or how to file an amended return, the Department of Revenue's motor vehicle tax section can provide guidance specific to your sales records.
This explainer covers Section 203 (NEW SECTION, chapter 82.32 RCW), pages 9–10 of HB2711. Consult a tax professional or the Department of Revenue to confirm your specific situation.