What is the ‘Fair Market Value’ and why do I have to pay tax on it and not what I paid for the vehicle?
Washington Law RCW 82.12.010 requires use tax to be collected by the Department of Licensing on the ‘average fair market value of a vehicle or vessel’. Fair market value is ‘the value of a vehicle according to the retail selling price, of a similar vehicle and/or vessel of like quality or character’. The actual selling price of a vehicle may or may not be within the average fair market value. For instance, a 1999 BMW that you purchased for $100.00 dollars does not mean that other 1999 BMW’s of a similar quality or character are usually worth $100.00.
