# How to Pay Sales Tax on a Car

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The amount of sales tax that will be paid on a particular car is determined by a number of factors, including the final sales price and the state the car was purchased in. How much sales tax and how to pay sales tax may seem confusing to some people, but it is a relatively simple thing to do that just about anyone can accomplish without a great deal of hassle.

### Things You'll Need

• Final sales price
• State tax percentage
• Calculator

## How to Pay Sales Tax on a Car

Determine how much sales tax will be paid on the car by looking at which state the vehicle was purchased in (this is especially important if you purchase a vehicle from a different state than where you live). When applying for the title and registration of the new car, write down the purchase price of the vehicle in the appropriate slot on the form.

Review the sales tax information for the state where the vehicle was purchased. (If the vehicle was purchased outside of the state where you live, but will be registered to you in your home state, you will most likely have to temporarily register the vehicle in the state where it was purchased and then transfer the title to your home state later.)

Multiply the total sale price by that particular state’s sales tax. (For example, if the state sales tax is 0.055 percent and you paid \$3,000 for your new car, you multiply the two to come up with the sales tax amount, which would be \$165 in this case.) Add whatever total you come up with when you multiply the final purchase price by the sales tax percentage to your final purchase price. (For example, if you are paying \$165 in sales tax on a \$3,000 vehicle purchase, you would pay \$3,165 in total.)

## Tips & Warnings

• Sales tax is typically paid on a vehicle when the vehicle is being registered. When a vehicle is purchased from a dealership and requires a loan, the sales tax, titling and registration fees are usually included in the loan paperwork.
• When dealing with private sales, some people will fill in a much lower purchase amount than was actually paid for the car to avoid paying higher tax. This is not recommended and may get you or the seller into trouble.

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