Car Sales Tax By State

Buying a car is, no doubt, a major expense. Beyond the vehicle's base price, numerous additional costs can significantly inflate the total out-of-pocket expenditure. One highly variable, yet inevitable expense encountered during car purchase has to do with sales tax. Charged in most U.S states, the sales tax on a vehicle can stir up quite a shock, especially when it accounts for a sizable chunk of the vehicle's price. While some states lean towards leniency with reduced sales tax requirements, others adopt a higher tax rate. Interestingly, a small selection of states, including Alaska, Delaware, Montana, New Hampshire, and Oregon, levies no car sales tax at all.

• Kansas tops the list with the highest car sales tax rate of 7.5%. Closely trailed by California at 7.3%, it's important to note that these higher rates can significantly influence the total cost of car ownership in these states.
• Five states have no sales tax on car sales at all — Alaska, Delaware, Montana, New Hampshire, and Oregon.
• The Midwest and South-East exhib moderately high sales tax rates with Tennessee, Indiana, Arkansas, and Georgia having a rate of 7.0%, 7.0%, 6.5%, and 6.6% respectively.
• Alabama stands out with a modest 2.0% rate, followed closely by Colorado with a 2.9% sales tax rate.
• For buyers in the Mid-Atlantic region, New Jersey offers a comparatively lower rate of 6.6%, while nearby states like Maryland and West Virginia have a standard 6.0% sales tax for cars.