Partial Sales and Use Tax Exemption for Zero-Emission Transit Buses

Assembly Bill 784 provides a partial sales and use tax exemption on purchases and leases of eligible zero-emission transit buses in California. As of October 9, 2019 and through December 31, 2023, qualified purchasers are able to take advantage of this tax exemption.

To receive the partial tax exemption, purchasers must meet three conditions: 1. The bus is a transit bus; 2. The qualified purchaser is either: city or county government, a transportation district/transit district, or a public agency that provides transit services to the public; 3. The transit bus is eligible under the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP).

HVIP-eligible transit buses can be found in the online catalog. The partial tax exemption applies whether or not HVIP funding was used to purchase or lease the transit bus. Purchases do not have to be made via an HVIP-eligible dealer or manufacturer in order to qualify for the partial tax exemption. For more information and specific transit bus definitions, view the informational flyer or visit www.CDTFA.ca.gov.