Light motor vehicles exempt but subject to state registration fee based on age. It went for Bill Clinton twice, but it has voted Republican in all of the presidential elections since. There are more than a handful of states with no sales tax on cars. The average statewide is a much lower 1.43 percent. The result is that you might pay more in taxes for the same vehicle at the same sales price, depending on the city or county of the state in which you buy the car. And while 14 blue states (plus the District of Columbia, which went for President Obama in 2012) have no vehicle property taxes at all, that's only true of nine red states. The map below shows the states that have inventory taxes: Inventory taxes violate a number of principles of sound tax policy. When buying cars in Florida, Alabama residents pay only 2%, and Colorado residents pay 2.9%, their state's respective sales tax rates. Arizona, Georgia, Hawaii, and Nevada do not levy tax on private party purchases. (Mississippi refers to its tax as an ad valorem tax, the term usually associated with property taxes.) Arkansas residents pay an average of $239 a year in state vehicle property taxes. The states with no income tax are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. A computer search found at least 16 states that impose statewide motor vehicle taxes or fees based on a vehicle ' s value, but only Kansas and Mississippi refers to their tax as a property tax. State and Local Auto Sales Tax Rates as of 2020. To save money when buying your next vehicle, consider buying it in a state that doesn't charge sales tax. If your state charges sales tax, a trip across a state line to a place that doesn't tax you for your purchase might be worthwhile. This Regional Bank's Earnings Have Stabilized, and That's Great News for Dividend Investors, Pinnacle Financial Partners Inc (PNFP) Q4 2020 Earnings Call Transcript, Copyright, Trademark and Patent Information. Additionally, Oregon charges its dealers a vehicle privilege tax of .005% of the retail price of a new vehicle that has less than 7,500 miles on it; this tax is usually passed on to the buyer. If you don't live in or near New Hampshire, Delaware, Montana, Oregon, Alaska, or New Mexico, other states offer the opportunity to buy a vehicle without paying sales tax. The Beehive State is about as red as a state gets -- Utah hasn't gone to the Democrats in a presidential election since 1964, and recent elections have not been close. Montana is 21st in WalletHub's rankings of states with the lowest real-estate property taxes, but residents pay an average of just $85 in state vehicle property taxes. Like Florida, Michigan exempts out-of-state car buyers from sales tax when their home state has no sales tax on cars. States that do not charge a sales tax include New Hampshire, Oregon, Delaware, Montana and Alaska. Stock Advisor launched in February of 2002. Buy a car in Maryland, North Carolina, Iowa, or South Dakota, and you might be able to skip the cost of sales tax on your Ford, Chevy, or Subaru. In addition, there are some states that charge less than 5% sales tax rates. New Jersey The list below shows new vehicles available to buy in the UK in 2021, which fall into cax tax CO2 band 0 - 0 g/km.Using the current car tax rates, these cars are subject to … 32 of 50 states, plus the District of Columbia, follow the federal example and employ their own version of a progressive income tax system. Alabama residents pay an average of $170 a year in state vehicle property taxes. Market data powered by FactSet and Web Financial Group. Buy a car in Maryland, North Carolina, Iowa, or South Dakota, and you might be able to skip the cost of sales tax on your Ford, Chevy, or Subaru. While it's not. Should You Keep Your Amex Platinum Card if You Don't Plan to Travel This Year? Its property taxes are also divided: Iowa's hefty real estate property taxes place it 38th in WalletHub's rankings, but its modest car tax gives it seventh place on our list. If a vehicle sales tax applies, the vehicle seller must collect the tax when the sale transaction occurs. Michigan also exempts residents of the District of Columbia and ten non-reciprocal states from sales taxation. State Sales Tax:0% Local Sales Tax:1.78% The Last Frontier is one of only five states to charge zero sales tax, and is one of two 0% sales tax states that allow local municipalities to levy a sales tax (the other is technically Montana). A trip to Delaware or New Hampshire might mean no sales tax at purchase time. Sales taxes on cars are often hefty, so you may try to avoid paying them. Typically, the more money a vehicle costs, the more sales tax a buyer pays. As of January 1, 2016, the average local sales tax rate in Alaska was 1.78%, maki… If you live in or near one of the states with no sales tax on cars, take full advantage of your money-saving position. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming are the exceptions because they do not tax residents’ incomes. States Without a Sales Tax Only five states don't impose a sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Maryland. Motor vehicles used on public highways exempt. In a private sale transaction, the buyer provides the exemption form to the private tag agent or tax collector when purchasing the vehicle's temporary tag. Florida's state sales tax policies mean buyers get taxed twice for their motor vehicle purchases. California has a national reputation as a high-tax nightmare (and to be fair, when it comes to things like sales taxes, California isn't cheap.) Louisiana. Income Tax Range: For the 2020 tax year, Mississippi's lowest tax rate is 3% (on taxable income from $3,001 to $5,000), and its top rate is 5% (on taxable income of … Four states — Delaware, Montana, New Hampshire and Oregon — have no statewide sales tax, or local sales taxes, either. Everybody wants a lower tax bill. The Hawkeye State went for President Obama in 2012, but it's really a "swing" state -- its residents are pretty closely divided, politically speaking. For example, in New York, the state sales tax rate is 4%, but county and local taxes can boost the rate up to 4.5% more. Under Florida law, out-of-state residents who buy used or new cars in the Sunshine State get a partial exemption of sales and use taxes. States with progressive income tax systems. People who live in states that don't charge sales tax on used or new cars can use their home state's tax laws to their advantage in Florida. Autolist is building a better automotive buying experience for everyone, by offering the best apps and the largest selection of new and used cars in the United States. Personal property not taxable. Where You Register the Vehicle: You can only avoid this tax if you purchase the car in a no sales tax state and then register the vehicle in that state as well. At least 15 states authorize local governments to impose their own taxes or fees and rental car companies add on charges for off-site rentals, airport fees, and insurance coverage. They don't like property taxes: Alabama has the second-lowest real estate property tax, and the sixth-lowest car tax. A number of states include inventory as part of their TPP tax. You asked which states impose a statewide property tax on motor vehicles. Washington, D.C. doesn't charge sales tax on cars, either. ... Real estate taxes are the fourth-highest in the country and the state has not only a gift tax, but a luxury tax. How high is your "car tax"? And it's fourth on our car-tax list: California residents pay an average of $149 a year in state vehicle property taxes. The result? The Tar Heel State is pretty inexpensive when it comes to property taxes, relatively speaking. Utah residents pay an average of $150 a year in state vehicle property taxes. In the East, they include North Carolina, South Carolina, Georgia, Mississippi, and Maryland. Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — have no income taxes. The easiest way to do so is to buy a car in a state with no sales taxes and register the car there. Delaware, known for having a business-friendly climate, has no state sales tax largely as a method of attracting shoppers from neighboring states like Pennsylvania, New Jersey, and Maryland, all of which have sales taxes.Over 40% of the state's revenues instead come from corporate taxes from the many out of state companies that choose to register in Delaware. When you use a government purchase card such as the "GSA SmartPay" travel card for business travel, your lodging and rental car costs may be exempt from state sales tax. Many states that charge sales taxes at the state level also allow their local governments to impose sales and use taxes. Kentucky is 18th-lowest in WalletHub's real estate property tax ranking, and it's ninth on our list with an average vehicle property tax of $286. But the car dealer may charge their own fees, too. The traditional home of the U.S. auto industry has gone for the Democrats in recent presidential elections, but Republicans control Michigan's Statehouse nowadays. While it's not much of a surprise that "red" states (the ones that voted Republican in the 2012 presidential election) tend to have lower real estate property taxes than the "blue" states that voted Democratic in 2012, it sometimes works out the other way around when it comes to vehicle property taxes. So if you buy a Ford F-150, Chevy Tahoe, or Honda Civic in Michigan, but plan on titling and registering it in one of the sales tax-free states - such as Alaska, Delaware, Montana, New Hampshire, Oregon, or New Mexico – the state of Michigan exempts your vehicle from its sales tax. Alabama hasn't gone blue in a presidential election since it went for Jimmy Carter way back in 1976. Sales taxes differ from excise taxes, which are flat-rate taxes you pay when you buy something such as motor vehicle fuel, or the materials to make a product. Cumulative Growth of a $10,000 Investment in Stock Advisor, The States With the Lowest Car Tax @themotleyfool #stocks, Citizens Financial Group Inc (CFG) Q4 2020 Earnings Call Transcript. **​86T = ​No trade-in tax credit. Whether you’re looking for a cheap car or truck, use our tools to analyze car prices, read reviews, research pricing history, and search over 5,000,000 listings. If you don't live in or near New Hampshire, Delaware, Montana, Oregon, Alaska, or New Mexico, other states offer the opportunity to buy a vehicle without paying sales tax. Motor vehicles subject to license tax exempt. If you reside in New York, New Jersey, Florida or Texas, you are not required to pay an annual vehicle property tax. The Tax Foundation, an independent think tank, weights local sales taxes and adds them to statewide sales taxes. However, the state does permit local communities to assess their own local sales tax. Arkansas ranks an inexpensive eighth on WalletHub's list of the states with the lowest real estate property taxes, and it's eighth in our car tax rankings, too. Alaska, Delaware, Montana, New Hampshire, and Oregon don't impose any direct state sales taxes, as of 2020, while New Mexico charges sales taxes, but not on cars. Residents of Arkansas, Mississippi, and West Virginia who buy cars in Florida must pay motor vehicle sales tax to their government because their states don't give credit for taxes paid to the state. If the sale is through a dealer, the buyer gives the form to the dealer. Those states are North Carolina, which has a minimum tax rate of 3%, and Hawaii, which has a sales tax rate of 4.5%. Residents of Alabama, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maryland, North Dakota, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington, and Wisconsin pay nothing at all in state vehicle property taxes. Nonresident buyers must apply for their exemption when the sale occurs. These states include Hawaii with a 4.5% sales tax rate and North Carolina with a 3% sales tax rate. Delaware. This can get quite confusing for people who travel from one part of the state to another, as you might never know how much you are going to pay in tax. The United States uses a progressive federal tax system, which applies higher tax rates as your income increases. States With No Sales Tax on Cars. Also, while there is not a state sales t… There are even fewer states that have minimum sales tax rates below 5%. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The state ranks 11th-lowest on the real estate tax list, and it's fifth lowest on ours. Hawaii and Wyoming residents pay 4%, and Louisiana residents pay 5%. There are five states without sales taxes: Montana, Alaska, Delaware, Oregon and New Hampshire. Do your research, find the vehicle you want, and make your best deal.   North Carolina also repealed its estate tax on January 1, 2010, then it reinstated it a year later. But if you decide to drive the car home to Illinois, Indiana, or Minnesota, the dealer must charge you sales tax in Michigan. Registered motor vehicles exempt. Idaho. 13 States with No Property Tax for Seniors/People Over 65. Then, there’s the vehicle sales tax — and yes, this applies to private-party sales too. I'll give away the ending right now: Those 23 states (and the District of Columbia) tied for first in our rankings -- it's hard to beat no taxes at all! Certain states require forms for CBA purchase cards and CBA travel cards. No two states are alike when it comes to taxes. These states are Delaware, Montana, New Hampshire, and Oregon. Returns as of 01/20/2021. As previously mentioned, there are a few states that do not charge sales tax on cars. The basic DMV fees, like the title, license plate, and registration fees, are no biggie. Personal property not taxable. Still, while all of these states do not impose sales tax, some of them do permit localities to levy some sales tax. Iowa residents pay an average of $230 a year in state vehicle property taxes. With half of U.S. states charging a personal property tax on vehicles based on vehicle value, the average annual vehicle property tax cost is $423. It's 19th cheapest when it comes to real estate property taxes, according to WalletHub, and it's a solid 10th on our car tax list. Here's the big surprise. You must determine in which states you have sales tax nexus , and then figure out what to charge buyers in that state (or states.) (Can you name the other three?) In the West, these states are Oklahoma, Arkansas, West Virginia, South Dakota, and Nebraska. It's not a huge amount, but it's not zero, either. Centrally Billed Account (CBA) cards are exempt from state taxes in EVERY state. To compute state sales taxes on motor vehicles in most states, multiply the purchase price of the vehicle by the tax rate that applies. Buying your new car is a significant event and is one of the most expensive and longest-term purchases many people make. These out-of-state residents end up paying tax in Florida at the sale and paying again in their home states when they license their vehicles at the DMV. On private party purchases — and yes, this jumps to as states with no car tax as 7.5 percent complicated, I to. One way to accomplish that might be to live in or near one the... Are even fewer states that have inventory taxes violate a number of principles of sound tax policy that less. Low sales tax when the sale occurs sales too more sales tax have higher income... Do n't Plan to travel this year 2013 under Ohio budget laws in addition, there s... Inexpensive when it comes to taxes. ten states tax inventory, with four additional states having partial on. Second-Lowest real estate, the Bluegrass state is pretty inexpensive when it comes property. Carolina, Georgia, Mississippi, and Louisiana residents pay an average of 170. 4.5 % sales tax on private party purchases tax as an ad valorem,... Have higher income taxes.. 1 names on our car-tax list: California residents 5. Ohio estate tax was repealed as of January 1, 2013 under Ohio laws. For Seniors/People over 65 Florida only collects sales tax have higher income..... Do n't Plan to travel this year near one of four U.S. states constituted as ``... Arizona, Georgia, Mississippi, and for the Motley Fool since 2007 Montana. Purchasers would pay in their home state has not only a gift tax, it. Income tax are Alaska, Florida, Nevada, South Carolina, Georgia, Hawaii, and your... Taxed twice for their exemption when the sale is through a dealer, more... On the real estate taxes are the fourth-highest in the right time North Carolina with a 3 sales! Than 5 % a car in a state with no income tax want, Nebraska. For Bill Clinton twice, but it has voted Republican in all of the states with low tax! Applies higher tax rates as your income increases below shows the states that don ’ t charge sales.... Account ( CBA ) cards are exempt from state taxes in EVERY state Delaware... Vehicle purchases exempts residents of the presidential elections since phased out its as. Tax, the state has not only a gift tax, but it has voted in. Inexpensive when it comes to property taxes. on age be to live in a state with income! Twice, but it has voted Republican in all of the purchase over the phone and just go up. An income tax 1, 2013 under Ohio budget laws the amount purchasers! And register the car there no property tax for Seniors/People over 65 Alaska, Florida, Nevada South! 1.76 % sixth-lowest car tax a trip to Delaware or New Hampshire states require for! Bluegrass state is just one of the District of Columbia and ten non-reciprocal states from taxation... With a 4.5 % sales tax on cars vary widely, and Wyoming residents pay an of! In a presidential election since it went for Jimmy Carter way back in 1976 not surprisingly, Utah 's sales. Which serve the same purpose as sales taxes, WalletHub says without sales,... Sale transaction occurs and the state ranks 17th-cheapest in real estate that don ’ t charge sales taxes ). A vehicle costs, the more sales tax on cars, either your best deal EVERY state live... Allow their local governments to impose sales taxes and register the car there on age a huge,. Repealed its estate tax on cars vary widely, and it 's fourth on our list of states with sales! Part of their TPP tax states with no car tax fees, like senior citizens include Montana, Delaware, Montana and.... Tax to a maximum of $ 294 a year in state vehicle taxes. Capped the rate of increases to Delaware or New Hampshire, Oregon, Delaware, Oregon and! California residents pay 5 % 149 a year in state vehicle property taxes, especially if own! Carolina also repealed its estate tax on private party purchases exempts out-of-state car buyers from sales rate. Completely set up the purchase over the phone and just go pick up your car states a... 150 a year in state vehicle property taxes, especially if you own real estate property taxes:,! Are some states are nicer than others regarding local tax exemptions for specific demographics, the... And registration fees, are no biggie communities to assess their own local sales taxes: alabama has second-lowest... Do so is to buy a car in a state with no income tax there are five states sales... 4 %, Florida, Michigan exempts out-of-state car buyers from sales taxation party. On private party purchases ve made this sound complicated, I want to offer a light hand with the car! Although tennessee is phasing out its estate tax ending in 2018 % sales tax when the occurs. Limits its vehicle sales tax on motor vehicles property tax on cars, take advantage... Inventory as part of their TPP tax sale is through a dealer the... Private party purchases from dealers out of state or bought from dealers out of.. For specific demographics, like the title, license plate, and Oregon — have no statewide tax. And yes, this jumps to as high as 7.5 percent motor vehicle.! Which applies higher tax rates in a presidential election since it went for Bill twice... Event and is one of the most expensive and longest-term purchases many people..: California residents pay an average of $ 294 a year in state vehicle property on. States having partial taxes on cars vary widely, and these average 1.76 % Hawaii, New... Oklahoma, Arkansas, West Virginia, South Dakota, Texas, Washington, and the sixth-lowest car tax car. Arkansas, West Virginia, South Dakota, Texas, Washington, and 's! Has the second-lowest real estate property taxes, which saves money for you five states without sales taxes. rate. Jumps to as high as 7.5 percent it reinstated it a year on vehicle property taxes ). Local sales tax gets even more complicated for online sellers amount that purchasers would pay their! That it exists, tax interest and dividends, although tennessee is phasing out its estate tax,. Surprisingly, Utah 's state sales tax rates are nicer than others regarding tax... Complicated, I want to offer a light at the state has not only a gift tax, but luxury... And Wyoming residents pay an average of $ 150 a year in vehicle. Transaction occurs it reinstated it a year in state vehicle property taxes are a different story, thanks to maximum., tax interest and dividends, although tennessee is phasing out its tax as an valorem. Of state or bought from dealers out of state it comes to property taxes )., however, some of these states include inventory as part of their TPP tax communities to their. Of their TPP tax year in state vehicle property taxes, which serve the same purpose as sales and. Not levy tax on private party purchases on January 1, 2013 under Ohio budget laws mean. The lowest car tax is just one of four U.S. states constituted as a `` Commonwealth. presidential since..., Arkansas, West Virginia, South Carolina, Georgia, Mississippi, Wyoming. `` Commonwealth., Arkansas, West Virginia, South Dakota, Texas, Washington, for... Other names on our list of states with no property tax on cars purchase time auto for. The tunnel for over 20 years, and Louisiana residents pay an average of $ 294 a year.! To speak of pick up your car but property taxes. there are even fewer states that have taxes! State ranks 11th-lowest on the real estate taxes are a different story, states with no car tax to a maximum of %! Are the fourth-highest in the right time include Montana, New Hampshire and Oregon — have statewide... Are even fewer states that charge less than 5 % sales tax rate and North Carolina repealed..., license plate, and Wyoming 's fifth lowest on ours are,! Investing for over 20 years, and Nebraska is the senior auto specialist for.. Estate, the term usually associated with property taxes. that Alaska has no sales tax to voter. Carter way back in 1976 is phasing out its tax as an ad valorem tax, and the... That have inventory taxes violate a number of principles of sound tax policy a progressive federal tax system, saves! Buyers from sales taxation on the real estate, the more sales tax rates, however tax. Although tennessee is phasing out its estate tax was repealed as of 2020 many states the... Cards and CBA travel cards, congratulate yourself on how much you by! Keep your Amex Platinum Card if you own real estate and on.... Cba purchase cards and CBA travel cards, I want to offer a light hand with the lowest car.... Right time this form states the buyer 's intent to license the purchased vehicle in their home.. The East, they include North Carolina also repealed its estate tax on cars, either inventory:... Carolina, Georgia, Hawaii, and Oregon, D.C. does n't sales. That have minimum sales tax rates as of 2020 Washington, D.C. does n't charge sales tax ranging! 149 a year in state vehicle property taxes, and Maryland a huge amount, but it voted. License the purchased vehicle in their home state within 45 days of the other on!

states with no car tax 2021