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What’s the Car Sales Tax in Each State?

car sales tax

car sales taxBuying and owning a vehicle is a significant investment. From the moment you purchase a new vehicle to the time you replace it, it will cost you money. Even after purchasing the car, you must pay for recurring expenses like maintenance, repairs, gas, insurance, and possibly more monthly payments.

But before you even leave with the car, there are several fees associated with buying it. One of the most overlooked expenses of buying a car is the sales tax.

Most states in the U.S charge sales tax on cars. What buyers rarely realize is that the sales tax can be a major expense. Imagine paying 8% sales tax on a $15,000 car, that's an additional $1,200 you have to spend without even considering DMV and documentation and registration fees. However, the car sales tax varies by state, and some states don't even charge tax.

In this post, we will break down the car sales tax by each state.

States with No Sales Tax

There are some states that do not charge any sales tax on cars. The states with no car sales tax include:

  • Alaska
  • Delaware
  • Montana
  • New Hampshire
  • Oregon

States with Minimum Sales Tax

Next up are the states that have minimum sales tax rates below 5%. The minimum sales tax states are:

  • Alabama - 2%
  • Colorado - 2.9%
  • Hawaii - 4%
  • Lousiana - 4%
  • Missouri - 4.23%
  • New Mexico - 4%
  • New York - 4%
  • North Carolina - 3%
  • Oklahoma - 3.25%
  • South Dakota - 4%
  • Virginia - 4.15%

States with High Sales Tax

The remaining states have the highest sales tax, all 7% or above. The high sales tax states are:

  • California - 7.25%
  • Indiana - 7%
  • Kansas - 7.5%
  • Nevada - 8.25%
  • Rhode Island - 7%
  • Tennessee - 7%

Car Sales Tax by State

In the table below we show the car sales tax rate for each state.

StateSales Tax
Alabama2.00%
Alaska0.00%
Arizona5.60%
Arkansas6.50%
California7.25%
Colorado2.90%
Connecticut6.35%
Delaware0.00%
Florida6.00%
Georgia6.60%
Hawaii4.00%
Idaho6.00%
Illinois6.25%
Indiana7.00%
Iowa5.00%
Kansas7.50%
Kentucky6.00%
Louisiana4.00%
Maine5.50%
Maryland6.00%
Massachusetts6.25%
Michigan6.00%
Minnesota6.50%
Mississippi5.00%
Missouri4.23%
Montana0.00%
Nebraska5.50%
Nevada8.25%
New Hampshire0.00%
New Jersey6.63%
New Mexico4.00%
New York4.00%
North Carolina3.00%
North Dakota5.00%
Ohio5.75%
Oklahoma3.25%
Oregon0.00%
Pennsylvania6.00%
Rhode Island7.00%
South Carolina5.00%
South Dakota4.00%
Tennessee7.00%
Texas6.25%
Utah6.85%
Vermont6.00%
Virginia4.15%
Washington6.50%
West Virginia6.00%
Wisconsin5.00%
Wyoming6.00%

Can I Save Money on Sales Tax by Buying a Car in a Different State?

If you live just across the border from a state with little or no sales tax, it might be tempting to buy your car out of state to save money on sales tax. While there are other reasons to consider buying a car out of state, you will not save money on sales tax by buying a car in a state with low or no sales tax. You must pay the sales tax for the state you will register your car in, which is the state you live in.

Can I Get a Sales Tax Credit for my Trade-in?

In many states, you can get a sales tax credit based on the value of your trade-in.  Depending on the amount of your appraisal, you may be able to get more money trading to the dealership than selling your car on your own.

We've created a calculator that will tell you the tax credit amount and help you determine whether it's better to trade-in to the dealership or to sell your car privately.

Frequently Asked Questions

Is there a sales tax when buying a new car?

Most states require a sales tax when purchasing a new car. The sales tax ranges from 0% to 11.5% depending on which state the car will be registered in.

Are there states with little to no sales tax on new cars?

States like Montana, New Hampshire, Oregon, and Delaware do not have any car sales tax. While states like North Carolina and Hawaii have lower sales tax rates below 5%.

What states have the highest sales tax on new cars?

States with some of the highest sales tax on cars include Oklahoma (11.5%), Louisiana (11.45%), and Arkansas (11.25%). States with high tax rates tend to be above 10% of the price of the vehicle.

Does the sales tax amount differ from state to state?

The minimum sales tax varies from state to state. Some have no sales tax while some states have high sales tax rates above 10%. The amount you pay in sales tax will depend on where the car is registered, not where it was purchased.