: When you purchase a vehicle out of state, you pay for sales tax in the state you plan to register it in, not the state you bought it. Buying a car in Tennessee from out of state is a smart way to savejust make sure you register the car properly. In Tennessee, the taxable price of your new vehicle will be considered to be $5,000, as the value of your trade-in is not subject to sales tax. Here's another wrinkle: Your business may have a tax nexus in another state, meaningyou have an affiliation or some other legal connection therethat effectively subjects you to its tax laws. '6/xeE/:r)-"Y(fe/7{ 7Yw*:f\HiYWCuqo:qlYo|,piv;) Print Exemption Certificates. Members save $872/year. What are the Different EV Charging Levels? The general state tax rate is 7%. This is a fee that dealerships charge to cover the cost of preparing and filing a sale. "What's the Process for Buying a Car Out of State?". As confirmed by the SalesTaxHandbook, Tennessee doesn't tax the value of your trade-in vehicle. Nevada leads the group with an 8.25 percent sales tax rate. Typically, when you buy a car in a different state than your home state, the car dealer collects your sales tax and sends it to your home state's relevant agency. What's the Car Sales Tax in Each State? [Updated 2023] However, seven states do not offer tax credits in this circumstance: California, Michigan, Virginia, Hawaii, Kentucky, Maryland, and Montana. Some states allow the dealer not to collect the tax payment if you prove that the vehicle will not be registered in that particular state. Tennessee, requires all drivers to carry car insurance, per person, $50,000 bodily injury liability per accident, and $15,000, If youd rather leave the hard work of gathering car insurance quotes to someone else, use. Knowing how much sales tax to pay when purchasing a vehicle also helps you to know when asking for financing from a lender. Generally, you pay the dealer the sales tax, and the dealer sends the revenue to your home state, but exceptions abound. Tennessee collects a 7% state sales tax rate. The next $1,600 multiplied by the state single article . We may earn commission from links on this page, but we only recommend products we back. @ysW9efhSn']0ib7fE;!Yy"m3\tq;0pNY Some people might think the same logic applies to bigger purchases, such as new vehicles. Therefore, it pays to research the appropriate taxes to pay before signing for the car. Some states, such as California, charge use taxes when you bring in a car from out-of-state, even if you've already paid the sales tax on the vehicle. These and other deductions can help lessen the sales tax burden you have to pay when buying a car.
tennessee sales tax on cars purchased out of state