Buying a car in one state and registering it in another can be a complex situation. Even if you bought the car in another state several years ago and paid sales tax there, you may have to pay some tax in your new state. Some states won't charge sales tax on a used car bought out of state but will impose "use" or "excise" taxes.
Pay Where You Buy
In most cases, you pay sales tax on the car in the state in which you bought it, but not always. Some states require you to present proof of sales tax payment in another state when you bring your car home to register it, and some will only give credits for tax paid in certain other states. For instance, New York will give a tax credit for taxes paid in Massachusetts or Connecticut but not New Jersey. Some states demand you pay sales tax in the state where you live and apply for a refund from the state of purchase. Others collect a tax of some sort on any car.
Pay When Register
You'll confront the tax issue when you register your car for the first time in the state where you live. You'll have to provide a bill of sale or other proof of ownership; a title from another state usually will suffice. In such states as Oklahoma, you'll pay a use or excise tax based on the value of the car when you register it for the first time, regardless of where you bought it. Some states, such as Massachusetts and Virginia, also charge or let cities charge an excise tax that's collected based on the value of the car every year or every time you renew your registration.
If you're a Texas resident and buy a car out of state, you'll pay a sales tax when you register it. In California, you'll pay a use fee on any vehicle brought in from out of state, whether it's a used car you just bought or one you're bringing in when you move.
Ask Before You Buy
In many states, sales taxes vary by city and county, because local governments impose those taxes in addition to anything the state collects. The only way to know for sure what your sales tax will be on a used car you buy in another state is to ask ahead of time. If you buy the car in a neighboring state, the dealer should know the rules. Otherwise, consult the motor vehicle department in the state where you live before you buy.
- Consumer Reports: Car Buying Advice
- Texas Department of Motor Vehicles: Out-of-State and Foreign Vehicles
- Washington Sate Department of Licensing: Use tax
- New York DMV - Statement of Transaction – Claim for Credit of Sales Tax Paid to Another State
- KING5: Drivers Hit with Car-Tab Sticker Shock
- Oklahoma: Motor Vehicle Excise Tax
- City of Boston: How to Pay Your Motor Vehicle Excise Tax
- Alexandria, Virginia: Personal Property (Vehicle) Tax
- California: Use Tax on Purchases of Vehicles, Vessels, Aircraft
- Who Pays the Personal Property Tax on a Leased Car?
- Can Georgia Charge Income Taxes on Income From Florida?
- How to Know If I Need to File State Taxes
- Pennsylvania Sales Tax Law
- How to Calculate Florida Sales Tax on a Motor Vehicle Purchase
- Do You Pay State Income Taxes Based on Where You Lived or Where Your Income Was Earned?
- How to File Taxes When Working Out of State
- Taxes When Buying a New Car