North Carolina (NC) Car 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 looking to purchase a vehicle in North Carolina?
Then you must know that the state sales tax rate is 3% in North Carolina.
While this is lower than the national average, you should still learn if tax exemptions or if buying a car out of state can help.
Here is a look at everything that you need to know about state sales tax in North Carolina.
Key Takeaways
- North Carolina does not collect a traditional sales tax on vehicle purchases but imposes a 3% highway-use tax calculated whenever a title is transferred.
- Counties in North Carolina also charge a yearly property tax on cars based on the value of the car.
- The tax is calculated on the vehicle price after any trade-ins but before incentives.
- The average dealership fee in North Carolina is $550, with no statewide limit on this fee.
Understanding North Carolina Car Sales Tax Video
How Much Is the New Car Sales Tax in North Carolina?
North Carolina technically doesn't collect a sales tax on vehicle purchases, but there is a 3% highway-use tax that is calculated whenever a title is transferred.
Annual Vehicle Property Tax in North Carolina
NC residents must also pay yearly property tax on their vehicles.
The tax is determined based on the appraised value of the vehicle. The rate depends on the county you reside in, as each one has its own property tax rate.
The county will determine your car's value and mail you a tax bill about 60 days before the car's registration expires. You must pay the property tax within 60 days before you renew vehicle registration.
How to Calculate North Carolina 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 North Carolina, it will always be at 3%. Multiply the vehicle price (after any trade-ins but before incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $30,000 with a highway-use tax of 3%. You trade-in a vehicle for $8,000 and get an incentive for $2,000. Maryland does not charge tax on trade-ins but does on rebates, so you would pay tax on the $22,000.
In this example, multiply $22,000 by .03 to get $660, which makes the total purchase price, $20,660 (account for the incentive).
Calculate North Carolina Sales Tax Example
- Initial Car Price: $30,000
- Highway-Use Tax: 3%
- Trade-In Amount: $8,000
- Rebate/Incentive Amount: $2,000
Sales Tax = ($30,000 - $8,000) * .03
Sales Tax = $660
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.
North Carolina Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
You will have to pay the 3% highway use tax on the purchase of a used car in North Carolina.
Which County Has the Highest Tax? Which Has the Lowest?
Alamance, Caswell, Chatham, Durham, Orange, and Person counties have the highest tax rates of 7.5%.
Avery, Brunswick, Camden, Chowan, Columbus, Currituck, Dare, Davie, Gates, Hyde, Mitchell, Pamlico, Tyrrell, Vance, and Washington counties have the lowest total tax rate of 6.75%.
However, for all vehicle sales, North Carolina charges a flat 3% highway-use tax.
How Are Trade-Ins Taxed in North Carolina
You do not have to pay a sale tax on the trade-in value of your vehicle in the state of North Carolina.
In other words, when calculating sales tax, be sure to subtract the trade-in value from the initial car price before calculating sales tax.
Let’s say that you're purchasing a new car for $45,000 and your trade-in is valued at $15,000. You would pay sales tax only on the $30,000.
How is Car Sales Tax Calculated on Private Sales in North Carolina
You will have to pay the 3% highway use tax to the North Carolina Department of Motor Vehicles for privately sold vehicles.
As an example, if you purchase a truck for $30,000 from a private party, then you will have to pay a $900 highway use tax.
How is Sales Tax Calculated for Rebates & Dealer Incentives
North Carolina 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 $40,000 and the dealer provides a $1,000 rebate. The taxable amount is still $40,000.
North Carolina DMV/State Fees
The following DMV fees apply for vehicles in North Carolina:
- Title: $56.00
- Plate Transfer: $15
- Registration Vehicles Under 5,000 pounds: $38.75 per year
- Registration Vehicles 5,000 to 5,999 pounds: $56.25 per year
- Registration Vehicles 6,000 pounds and Over: $67.25 per year
- Documentation Fee: $550 on average
North Carolina Dealership Fees
The average dealership fee in North Carolina is $550, and there is no statewide limit on how much this fee can be. This is known as the document or "doc fees".
These are the fees paid to handle the state paperwork when dealing with a vehicle sale. Usually, you will not be able to negotiate this fee. However, other dealers fees such as advertising and transport fees can be negotiated.
Exemptions for Car Sales Tax in North Carolina
A highway use tax can be exempt for the following reasons:
- Salvage vehicle title purchased by an insurance company
- Vehicle title transferred to a will
- Vehicle title being transferred in a divorce agreement
- Vehicle title is being transferred to a revocable trust from an owner who is the sole beneficiary of the trust
North Carolina EV Rebates & Incentives
There are no EV rebates or incentives for the purchase of EV vehicles in North Carolina. However, there is a federal rebate of up to $7,500 on EV vehicles.
There are some additional perks like HOV lane access and exemption from emissions inspection requirements.
Conclusion
North Carolina does not charge traditional car sales tax, but they do charge a 3% highway-use tax anytime a title is transferred. Furthermore, car owners must pay annual property tax on their vehicles based on their appraised value and their county's property tax rate.
Use the NC Sales Tax Calculator above to estimate how much you must pay in taxes and fees when buying a vehicle.
Looking for the car sales tax in another state? Check out our comprehensive guide on car sales tax in each state!
Tax information and rates are subject to change, please be sure to verify with your local DMV.
