About Auto Sales Tax

Automotive sales tax is much different from the normal sales tax that you may be used to paying. The issues are complex and adding to the confusion is that each state is different. Understanding the principles of auto sales tax will help you know what to look for in your state.

Regional Tax Issues

Each state has the right to levy the auto sales tax that they believe is fair. Most states charge anywhere from three percent and upward. Oregon, Alaska and New Hampshire are the only states that do not charge an auto sales tax. 

Computing Auto Tax

Most states will levy the auto sales tax at the day of the sale. This allows you to know what your tax burden is immediately, helping you to get it taken care of quickly. However, some states will levy the auto sales tax on your purchase each year if you finance. Be sure to find out how your state computes auto tax before you buy. 

Types of Cars Taxed

Although you may be led to believe that only cars sold at a dealership will be subject to taxes, this is not the case. States also levy tax on private auto sales. This tax will need to be paid when the car is registered with the state.

Uses for Auto Tax

Most often, the auto tax is used for road related issues. Since those who buy cars will be the ones using the road, the common thought is that they should be the ones who bear the burden of their maintanance.