Maryland 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.
Are you ready to buy a car in Maryland? Then you will want to make sure that you know the state sales tax.
The state sales tax can affect the final purchasing price of your vehicle. Because of this potential expense, many people want to know if tax exemptions or if buying a car out of state can help.
Here’s a look at the current state sales tax information along with any other DMV fees that you may have to pay in Maryland.
How Much Is the Car Sales Tax in Maryland?
The state sales tax rate on a vehicle sale in Maryland is 6%. There are no additional local or county tax rates in Maryland.
How to Calculate Maryland Sales Tax on a Car
To calculate the sales tax on your vehicle, find the total sales tax fee for the city and/or county. In Maryland, it will always be at 6%. Multiply the vehicle price (before any trade-ins and/or incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $40,000 with the state sales tax of 6%. You trade-in a vehicle for $5,000 and get an incentive for $2,000. Maryland does charge tax on trade-ins and rebates, so you would pay tax on the full $40,000 purchase price.
In this example, multiply $40,000 by .06 to get $2,400, which makes the total purchase price, $40,400 (account for the incentive).
Calculate Car Sales Tax in Maryland Example
- Initial Car Price: $40,000
- Sales Tax Rate: 6%
- Trade-In Amount: $5,000
- Rebate/Incentive Amount: $2,000
Sales Tax = ($40,000) * .06
Sales Tax = $2,400
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.
Maryland Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, all used car sales are subject to a 6% sales tax.
Which County Has the Highest Tax? Which Has the Lowest?
Maryland has a 6% sales tax in all counties. There is no additional local tax collected in Maryland.
Car Sales Tax for Trade-Ins in Maryland
You have to pay a sale tax on the trade-in on your vehicle in the state of Maryland.
In other words, when calculating sales tax, be sure to use the initial full purchase price of the vehicle.
Let’s say that you're purchasing a new car for $45,000 and your trade-in is valued at $12,000. You would still pay sales tax on the full $45,000 regardless of the trade-in amount.
Car Sales Tax on Private Sales in Maryland
There is a 6% tax for private car sales in Maryland. However, there are some important conditions to consider.
If the vehicle is 7 years old or newer, then the 6% is calculated on the purchase price or the vehicle's book value. Any vehicle that is older than 7 years, will be taxed on the purchase price.
The minimum excise tax for private sales is $38.40, which is based on the minimum value of a car of $640.
An MVA Bill of Sale is required if the sales price is lower than the book value. If there is no notarized bill of sale, and the sales price is within $500 of the book value (National Publication of Used Car Values), then Maryland will use the lower sales price instead of the book value.
Tax on Rebates & Dealer Incentives
The state of Maryland does tax rebates and dealer incentives. In other words, be sure to use the full purchase price when calculating sales tax.
As an example, let’s say you want to purchase a new SUV for $30,000 and the dealer provides a $2,000 rebate. The taxable amount is still $30,000.
Maryland DMV & State Fees
Maryland charges the following DMV fees
- Passenger Vehicles Under 3,700 Pounds: $135
- Passenger Vehicles Over 3,700 Pounds: $187
- Car Title: $100
- Emission Tests: $14
Maryland Dealership Fees
In Maryland, a dealership can charge a maximum of $500 in document fees. However, the average cost is about $295. The document fees cover the cost of handling the paperwork to process the vehicle sale.
Dealerships may also impose other fees such as advertising and transport fees. These fees will vary from dealership to dealership and can often be negotiated.
When Sales Tax Is Exempt in Maryland
You can avoid paying sales tax on a vehicle in Maryland if you receive the vehicle as a gift.
Also, if you register the vehicle less than 30 days in another state, then you are exempt from paying the sales tax.
Maryland EV Rebates & Incentives
Maryland offers a $3,000 tax credit, and the federal tax credit is still available.
However, the state does offer a rebate of up to $700 for individuals installing electric vehicle supply equipment (EVSE).
Tax information and rates are subject to change, please be sure to verify with your local DMV.
