Arizona Vehicle Sales Tax & Fees [+Calculator]
Michael Collado is a car buying expert and has been a professional automotive writer since 2009. He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships. Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.
Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.
If you are looking to purchase a new or used vehicle, then you have to consider a number of factors.
One thing that you should know about is the sales tax that is associated with a vehicle sale. Because of the potential expense of vehicle sales tax, many people want to know how to avoid paying car sales tax or if buying a car out of state can help.
Here’s everything that you need to know about sales tax in Arizona.
Table of Contents
- How Much Is the Car Sales Tax in Arizona?
- How to Calculate Arizona Sales Tax on a Car
- Arizona Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which County in Arizona Has the Highest Tax?
- Which County in Arizona Has the Lowest Tax?
- Car Sales Tax for Trade-Ins in Arizona
- Car Sales Tax on Private Sales in Arizona
- Tax on Rebates & Dealer Incentives
- Arizona DMV & State Fees
- When Sales Tax Is Exempt in Arizona
- Arizona EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in Arizona?
The current statewide sales tax in Arizona is 5.6%.
However, there may be an extra local or county sales tax added onto the base 5.6% state tax. Local tax rates range from 0% to 5.6%, with an average of 2.132%. The max combined sales tax you can expect to pay in Arizona is 11.2%.
How to Calculate Arizona Sales Tax on a Car
To calculate the sales tax on your vehicle, find the total sales tax fee for the city. The minimum is 5.6%. Multiply the vehicle price (after trade-in and/or incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $45,000 with the state sales tax of 5.6%. You trade-in a vehicle for $5,000 and get an incentive for $2,000. Arizona does not charge tax on trade-in and rebates, so you would subtract $7,000 from the car cost, to get $38,000, which is the taxable amount.
In this example, multiply $38,000 by .056 to get $2,128, which makes the total purchase price, $40,128.
Calculate Car Sales Tax in Arizona Example:
- Initial Car Price: $45,000
- Sales Tax Rate: 5.6%
- Trade-In Amount: $5,000
- Rebate/Incentive Amount: $2,000
Sales Tax = ($45,000 - $5,000 - $2,000) * .056
Sales Tax = $2,128
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
Arizona Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, the sales tax rule applies to the purchase of both new and used vehicles in the state of Arizona.
Which County in Arizona Has the Highest Tax?
When you calculate the state and county tax, the counties with the highest total tax rates are Pinal County at 11.2% and Pima County at 11.1%.
Which County in Arizona Has the Lowest Tax?
When accounting for both the state and the county tax rate, the counties with the lowest tax are Santa Cruz and Mohave County with a combined tax of 8.6%.
It's worth noting that many cities in Mohave County do not add on an extra local tax, so it uses the base 5.6%.
Car Sales Tax for Trade-Ins in Arizona
You do not have to pay a sale tax on the trade-in on your vehicle in the state of Arizona. In other words, when calculating sales tax, be sure to subtract the trade-in amount from the car price.
Let’s say that you're purchasing a new car for $40,000 and your trade-in is valued at $10,000. This would put your new vehicle purchase price at $30,000, which is the taxable amount.
Car Sales Tax on Private Sales in Arizona
There is no tax on private sales of vehicles in the state of Arizona.
As an example, let’s say that you would like to purchase a used vehicle for $16,000 from a private owner. This is known in Arizona as a “casual sale” and it is not subject to a sales tax.
Tax on Rebates & Dealer Incentives
The state of Arizona does not tax rebates and dealer incentives. In other words, be sure to subtract the incentive amount from the car price before calculating the sales tax amount.
As an example, let’s say you want to purchase a new truck for $47,000 and the dealer provides a $2,500 rebate. You do not have to pay a sales tax on the $2,500 rebate. Therefore, the taxable amount is $44,500.
Arizona DMV & State Fees
Arizona charges the following DMV/State fees:
- Drivers License Fees: $10 to $25 (Varies by Age)
- Motor Vehicle Record: $5
- New Automobile Annual Registration: $2.80 per $100 of assessed value.
- Used Automobile Annual Registration: $2.89 per $100 of assessed value.
Arizona Dealership Fees
Arizona dealerships charge for the following fees:
- Doc Fees: ~$410. No Statewide Cap
- Advertising Fees: ~$500 (Varies)
- Transport Fee: $800-$1,700
When Sales Tax Is Exempt in Arizona
You can avoid paying sales tax on vehicle transactions in Arizona if you register your vehicle outside of the state. The purchaser has to provide proof that the vehicle is registered in another state in order to operate in Arizona. Learn more about the best states to buy a car.
If you are using the vehicle for a non-profit or religious institution, you may be exempt from paying sales tax.
Arizona EV Rebates & Incentives
Arizona may offer reduced tax rates to those who own an electric or alternative fuel vehicle.
Also, in addition to the federal tax incentives, Arizona utility companies offer reduced electricity rates when charging during off-peak hours.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
Frequently Asked Questions
What is the sales tax on a car purchased in Arizona?
The state sales tax on a vehicle purchase in the state of Arizona is 5.6%. However, this amount does not include local county sales taxes. The average sales tax in Arizona is 7.732%.
Do I have to pay sales tax on a used car in Arizona?
Yes, you will have to pay sales tax on a used car that is purchased through a dealership.
Which county in Arizona has the lowest tax?
When accounting for both the state and the county tax rate, the county with the lowest tax is Santa Cruz County with a total 8.6% tax.
Which county in Arizona has the highest tax?
When you calculate the state and the county tax, the county with the highest total tax rate is Pinal County at 11.2%.
Do I have to pay sales tax on a gifted car in Arizona?
You do not have to pay tax on a gifted vehicle as long as the vehicle is indicated as a gift in Form REG 256.
How much is registration in Arizona?
Vehicle registration in Arizona is determined by the assessed value of the vehicle. The rate for new and used vehicles are as follows:
- New Automobile Annual Registration: $2.80 per $100 of assessed value
- Used Automobile Annual Registration: $2.89 per $100 of assessed value
Does a trade-in reduce sales tax in Arizona?
Yes. A trade-in value is not figured in the final taxable price of the vehicle. As an example. If you purchase a vehicle with an agreed-upon price of $40,000 and you have a trade-in vehicle valued at $8,000, then the final taxable price of the vehicle is going to be $32,000.
How can I avoid paying sales tax in Arizona?
You can reduce sales tax in Arizona by purchasing the vehicle in a county with a lower county sales tax. You can also consider purchasing the vehicle from a private owner. Finally, you can see if you can have the vehicle gifted to you.