Car Sales Tax by State, and Whether a Trade-In Lowers It

Sales tax is usually the largest single charge added to the price of a car, and it is the one line you cannot negotiate. What you can do is know the number before you walk in, so the dealer's quote holds no surprises and you can tell when a figure is wrong.

Three facts decide what you owe: the rate where you will register the car, what that state counts as the taxable amount, and whether local taxes are added.

The table

State rates only. The last column says what local taxes apply. Each state name links to a page with the details, a worked example, and the official sources.

State	State rate on vehicles	Trade-in lowers the tax?	Local taxes
Alabama	2%	Yes	County and city sales taxes also apply to vehicle sales, and the rates vary by location.
Alaska	None	Check with the state	Alaska has no statewide sales tax, but more than 100 municipalities levy their own sales tax at rates from 1% to 7%, and whether it applies to a vehicle purchase depends on the municipality.
Arizona	5.6%	Yes	County excise taxes and city privilege taxes are added to the 5.6% state rate, and the rates vary by location.
Arkansas	6.5%	Yes	Local sales or use tax also applies and is determined by the location where the vehicle is registered.
California	7.25%	No	District taxes of 0.10% to 2.00% each apply in most areas, and the DMV lists total rates from 7.25% to 10.25% depending on the city and county.
Colorado	2.9%	Yes	City, county, and special district sales taxes also apply, and which ones apply depends on where the vehicle will be registered.
Connecticut	6.35%	Yes	Motor vehicles are subject to a separate annual local property tax, which the town assesses on 70% of average retail value.
Delaware	5.25%	Yes	Delaware does not impose a state or local sales tax.
District of Columbia	1% to 11%, by weight and fuel economy	Check with the state	Check with the state
Florida	6%	Yes	Most counties add a discretionary sales surtax, set by the buyer's home address, that applies only to the first $5,000 of the purchase price.
Georgia	7%	Yes	Vehicles subject to TAVT are exempt from sales and use tax, so no separate local sales tax is charged on the purchase.
Hawaii	4%	Check with the state	All four counties add a 0.5% county surcharge to the general excise tax through December 31, 2030.
Idaho	6%	Yes	Check with the state
Illinois	6.25%	Yes	Local taxes are added to the 6.25% state rate and vary by location; for example, the Department of Revenue's vehicle use tax rate for a Cook County address is 7.5% from August 1, 2026, and Chicago adds a 1.25% home rule use tax.
Indiana	7%	Yes	Check with the state
Iowa	5%	Yes	Vehicles subject to registration are exempt from Iowa sales tax and instead pay the state fee for new registration.
Kansas	6.5%	Yes	City, county, and special jurisdiction sales taxes are added, and a dealer charges the combined state and local rate in effect at its place of business.
Kentucky	6%	Yes	There are no local sales and use taxes in Kentucky.
Louisiana	5%	Yes	Parish and municipal sales taxes are added to the state rate and are based on where the vehicle is domiciled.
Maine	5.5%	Yes	Separately from the 5.5% sales tax, a municipal excise tax must be paid at the town office before a vehicle can be registered.
Maryland	6.5%	Yes	Check with the state
Massachusetts	6.25%	Yes	Check with the state
Michigan	6%	Partly	Michigan does not allow cities or other local units to impose a sales tax.
Minnesota	6.875%	Yes	Local sales tax does not apply to vehicle sales, but a $20 local vehicle excise tax is collected on vehicles sold in counties and cities that impose one.
Mississippi	5%	Yes	Check with the state
Missouri	4.225%	Yes	Local sales tax is charged in addition to the 4.225% state rate.
Montana	None	Check with the state	A county may impose a local option motor vehicle tax of up to 0.7% of the vehicle's value, or a flat fee, which is paid with registration.
Nebraska	5.5%	Yes	Local sales and use tax also applies, based on the address where the vehicle is registered.
Nevada	6.85%	Yes	County additions raise the combined rate above the 6.85% statewide minimum in most counties, up to 8.375% in Clark County, according to the Department of Taxation's county rate map.
New Hampshire	None	Check with the state	The town or city collects a registration permit fee of 18 mills per dollar of the maker's list price for a current model year vehicle, stepping down each year to 3 mills for vehicles five or more model years old.
New Jersey	6.625%	Yes	Check with the state
New Mexico	4%	Yes	Vehicle sales that are subject to the motor vehicle excise tax are exempt from gross receipts tax, so no city or county tax is added to the vehicle price.
New York	4%	Yes	County, city and school district sales taxes are added at the rate in effect where the buyer lives, plus 0.375% in the Metropolitan Commuter Transportation District (New York City and Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester counties).
North Carolina	3%	Yes	Motor vehicle sales are exempt from the general state and local sales tax; the 3% highway use tax applies instead.
North Dakota	5%	Yes	The motor vehicle excise tax applies instead of state and local sales taxes, so no city or county sales tax is added.
Ohio	5.75%	Partly	Counties and regional transit authorities add their own sales tax, charged at the rate in the buyer's county of residence; the combined rate cannot exceed 8.75%.
Oklahoma	4.5%	Partly	Vehicle sales that are subject to the excise tax are not subject to city or county sales taxes.
Oregon	None	No	Oregon does not have a general sales tax.
Pennsylvania	6%	Yes	Residents of Allegheny County pay 7% in total and residents of the City of Philadelphia pay 8% in total.
Rhode Island	7%	Partly	Check with the state
South Carolina	5%	Yes	Vehicles that pay the infrastructure maintenance fee are exempt from state and local sales and use taxes.
South Dakota	4%	Yes	A motor vehicle purchase is subject to the 4% motor vehicle excise tax instead of state and municipal sales tax.
Tennessee	7%	Yes	Local sales tax of 1.5% to 2.75%, depending on the county or city, applies only to the first $1,600 of the vehicle price in most places and to the first $300 in Hamblen and Hancock counties.
Texas	6.25%	Yes	There is no local motor vehicle tax in Texas.
Utah	4.85%	Yes	Local sales taxes are added to the state rate and vary by location; a dealer sale uses the rate at the dealer's location and a private sale uses the buyer's registration address.
Vermont	6%	Yes	Check with the state
Virginia	4.15%	No	State law bars cities, towns, and counties from imposing a local sales or use tax on motor vehicles.
Washington	7%	Yes	Local sales tax varies by city and county and is added to the state rate.
West Virginia	6%	Yes	Check with the state
Wisconsin	5%	Yes	County and city sales taxes are added based on where the vehicle will be customarily kept; for example, Milwaukee County charges 0.9% and the City of Milwaukee charges 2%.
Wyoming	4%	Yes	County local option taxes are added to the 4% state rate, and the rate in the county of the owner's principal residence applies.
"Check with the state" means we could not confirm that item from an official source, so we left it blank rather than repeat an unofficial figure.

How to read it

The rate follows the registration, not the dealership

If you live in one state and buy in another, you generally owe tax to the state where the car will be registered. Dealers near state lines handle this routinely, but not all of them collect the other state's tax for you. If the dealer does not, you pay it yourself when you register. Ask which will happen, and get it in writing. More on this in buying a car out of state.

The state rate is a floor

Many states let counties, cities, or transit districts add their own tax to a vehicle sale, and some states apply a special vehicle rate that differs from their general sales tax. Your true rate is the state rate plus whatever applies at your home address. Your state's revenue or motor vehicle agency usually has a lookup by address or ZIP code.

Some states call it something else

Several states charge a vehicle-specific tax instead of the general sales tax, under names such as excise tax, use tax, highway use tax, or title tax. It works the same way for your budget: a percentage of the price, due when you title the car. A few states charge no sales tax on vehicles at all, though they may charge other fees.

The trade-in rule matters more than people expect

In most states, when you trade in a car, you are taxed only on the difference between the new car's price and the trade-in value. In a minority of states you are taxed on the full price no matter what you trade in.

Here is why it matters, as an example with round numbers. Say you are buying a $30,000 car, your trade-in is worth $10,000, and the rate is 6 percent.

	Trade-in lowers the tax	Trade-in does not
Taxable amount	$20,000	$30,000
Tax at 6%	$1,200	$1,800

In the first kind of state, trading in is worth an extra $600 to you compared with selling the car yourself for the same money. So a private buyer would have to pay you more than $10,600 before selling privately comes out ahead. In the second kind of state, there is no such advantage and the comparison is simply price against price. Sell or trade in walks through that decision.

What else can be taxed

States differ on the smaller items, and the differences add up:

Manufacturer rebates. Some states tax the price before the rebate, others after.
Dealer fees. The documentation fee is taxed in many states. See doc fees by state.
Add-ons and service contracts. Accessories are usually taxed; service contracts vary.
Leases. Some states tax each payment, some tax the whole lease up front.

Because of this, two quotes with the same selling price can carry different tax lines. Ask the dealer to show how the tax was calculated.

How to check a dealer's tax figure

Find your state in the table and open its page.
Add any local tax for your home address, using your state's lookup.
Work out the taxable amount: selling price, plus taxable fees and add-ons, minus the trade-in if your state allows it.
Multiply, and compare with the tax line on the dealer's written quote.

The out-the-door calculator does this for you: choose your state and it fills in the state rate and trade-in rule. A small difference usually means a local tax or a taxable fee you did not count. A large one deserves a question before you sign. The quote you are checking should be a full out-the-door price, itemized.

This guide explains how vehicle taxes generally work. It is not tax advice, and your state's revenue agency is the final word.