Texas Vehicle Sales Tax & Fees [+Calculator]

Texas Sales Tax

If you're looking to purchase a vehicle in Texas, then you will want to know the current state sales tax on vehicle sales.

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, we will take a look at current sales tax rules and other associated fees associated with vehicle sales in Texas.

How Much Is the Car Sales Tax in Texas?

How Much Is Texas Sales TaxThere is a 6.25% sales tax on the sale of vehicles in Texas.

However, there may be an extra local or county sales tax added onto the base 6.25% state tax. Local tax rates range from 0% to 2%, with an average of 1.647%. The max combined sales tax you can expect to pay in Texas is 8.25%.

How to Calculate Texas 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 6.25% in Texas. Multiply the vehicle price (after trade-in and/or incentives) by the sales tax fee.

For example, imagine you are purchasing a vehicle for $35,000 with the state sales tax of 6.25%. You trade-in a vehicle for $3,000 and get an incentive for $1,000. Texas does not charge tax on trade-ins and rebates, so you would subtract $4,000 from the car cost, to get $31,000, which is the taxable amount.

In this example, multiply $31,000 by .0625 to get $1,937.50, which makes the total purchase price, $32,937.50.

Calculate Car Sales Tax in Texas Example

  • Initial Car Price: $35,000
  • Sales Tax Rate: 6.25%
  • Trade-In Amount: $3,000
  • Rebate/Incentive Amount: $1,000

Sales Tax = ($35,000 - $3,000 - $1,000) * .0625
Sales Tax = $1,937.50

Texas Sales Tax Calculator

Do I Have to Pay Sales Tax on a Used Car?

You will have to pay a 6.25% sales tax plus any local tax on a used vehicle purchase.

Which County Has the Highest Tax? Which Has the Lowest?

The vast majority of Texas counties have the highest sales tax in the state at 8.25%. However, Borden, King, Kennedy, Kent, Loving, and McMullen have the lowest tax rate of 6.25%.

Car Sales Tax for Trade-Ins in Texas

Trade In TexasYou do not have to pay a sale tax on the trade-in on your vehicle in the state of Texas. 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 $30,000 and your trade-in is valued at $10,000. This would put your new vehicle purchase price at $20,000, which is the taxable amount.

Car Sales Tax on Private Sales in Taxes

Private car sales are still taxed 6.25% in Texas, but it is calculated from the purchase price or standard presumptive value (SPV), whichever is higher.

The SPV figure is based on similar car sales in Texas. You can use Black Book to enter your VIN and odometer reading to get an estimated SPV amount. If it is a late model and there is no value available, the tax is then based on the purchase price.

Tax on Rebates & Dealer Incentives

Dealer Incentive TexasThe state of Texas 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 $50,000 and the dealer provides a $3,000 rebate. You do not have to pay a sales tax on the $3,000 rebate. Therefore, the taxable amount is $47,000.

Texas DMV & State Fees

Here are the state DMV fees in Texas when it comes to registering and titling a vehicle.

Registration Fees:

  • Standard Fee - $50.75 per year
  • Vehicles 6,001 to 10,000 pounds - $54.00 per year
  • Vehicles Over 10,000 pounds - Based on the weight of the vehicle.

Title Fee:

  • Standard Fee - $33

Texas Dealership Fees

The average dealership fee is $135, with no statewide limit. This is known as the documentation or "doc fee".

This fee covers the cost of finalizing the vehicle sale with the state. Usually, this fee can not be negotiated. However, other dealership fees such as the advertising fee and the transport fee can be negotiated.

When Sales Tax Is Exempt in Texas

Texas Tax ExemptionsYou can be exempt from paying sales tax on a vehicle sale in the following situations:

  • You plan to move out of the state in 90 days.
  • The vehicle that is 25 years or older
  • You are disabled
  • You receive the vehicle as a gift
  • Vehicles swapped in an even trade

Texas EV Rebates & Incentives

You can receive a $2,500 rebate if you purchase an electric vehicle. This is on top of the up to $7,500 Federal rebate on electric vehicles.

 

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 Texas?

The sales tax on a vehicle purchased in Texas is 6.25%.

Do I have to pay sales tax on a used car in Texas?

There is a 6.25% sales tax on used vehicle sales in Texas. However, if you bought a car from a private party, then the sales tax is calculated from the standard presumptive value (SPV) or purchase price, whichever is higher.

Which county in Texas has the lowest tax?

Borden, King, Kennedy, Kent, Loving, and McMullen have the lowest tax rate of 6.25%.

Which county in Texas has the highest tax?

The vast majority of Texas counties have the highest sales tax in the state at 8.25%.

Do I have to pay sales tax on a gifted car in Texas?

You do not have to pay sales tax on a gifted car. However, there is a $10 gift tax.

How much is registration in Texas?

Here are the state DMV fees in Texas when it comes to registering and titling a vehicle.

Registration Fees:

  • Standard Fee - $50.75 per year
  • Vehicles 6,001 to 10,000 pounds - $54.00 per year
  • Vehicles over 10,000 pounds - Based on the weight of the vehicle.

Does a trade-in reduce sales tax in Texas?

A trade-in is not subject to sales tax. As an example, if you purchase a new truck for $50,000 and your trade-in is worth $12,000, then you will only have to pay sales tax on the $38,000.

How can I avoid paying sales tax in Texas?

You can be exempt from paying sales tax on a vehicle sale in the following situations:

  • You plan to move out of the state in 90 days
  • The vehicle that is 25 years or older
  • You are disabled
  • You receive the vehicle as a gift
  • Vehicles swapped in an even trade