The vehicle weight. Certain types of car sales or transfers in Tennessee are exempt from local sales tax, such as: As specified by the Tennessee Department of Revenue, other exceptions to car and boat sales tax include when vehicles are: Sales tax for a car in Tennessee includes a state sales tax, a county or city sales tax, and a single article tax. 8-5.5 State Sales Tax Used for In-transits. Exceptions are available in several situations, so it's important to learn how car sales tax works in Tennessee. Here is an example of how to find the total sales tax for a car purchase: For a car purchase with no trade-in, your equation would look like this for a $20,000 car and a 2 percent local tax rate: ($20,000 x .07) + ($1600 x .02) + ($1600 x .0275) = $1476. Specialty and commercial tags will cost you more. 1 - Average DMV and Documentation Fees for Tennessee calculated by Edmunds.com. Many dealerships allow you to trade-in your old car in exchange for a credit applied to the price of a new vehicle. motor vehicle or boat, is subject to the sales or use tax. If the out-of-state leasing company is registered with the Illinois Department of Revenue to collect Illinois tax, then Form ST-556 is used to report the purchase. Personal Property Tax: Some states require you to pay an annual tax on the value of your vehicle. 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. For vehicles that are being rented or leased, see see taxation of leases and rentals. Generally, the out-of-state leasing company will complete and file this tax return along with the required title forms for you. Warrantee/Service Contract Purchase Price. If the purchaser is taking the vehicle to Canada or another country (including U.S. territories), collect six percent Michigan sales tax. Last sales … Car Purchase Price. Local sales tax varies by location. The process of determining which tax rates apply to individual purchases is referred to as "sales tax sourcing," and it can be somewhat complicated to figure out. Tennessee drivers pay an average of $241 for title, registration, and plate fees. There is a maximum tax charge of 36 dollars for county taxes and 44 dollars for state taxes. There is also 5 out of 820 zip codes in Tennessee that are being charged city sales tax for a ratio of 0.61%. For example, if you buy a car for $20,000, then you'll pay $1400 in state sales tax. If you buy a motor vehicle out-of-state and initially register it in your home state, then you should not pay sales tax at the point of purchase, but instead, when registering back home; otherwise you run the risk of paying car tax twice, depending on each state's car tax … SalesTaxHandbook is a free public resource site, and is not affiliated with the United States government or any Government agency, Sales Tax Handbooks By State | You may also have to pay any applicable local sales … Let us know in a single click. Tennessee collects a 7% state sales tax rate. State Sales Tax is 7% of purchase price less total value of trade in. Several examples of of items that exempt from Tennessee sales tax … As reported by CarsDirect, Tennessee state sales tax is 7 percent of a vehicle's total purchase price. Calculating what you would pay the state of Tennessee for state auto sales tax is relatively straightforward. Total purchase price multiplied by the 7 percent state sales tax rate. When you buy a car in Tennessee, you usually must pay state and local sales tax. Tennessee State law requires that any vehicle operated on the roads of Tennessee be properly titled, registered, and that appropriate sales tax be paid on the transfer of any vehicle, whether purchased … How to Claim the Vehicle Sales Tax Deduction . These fees are separate from the sales tax, and will likely be collected by the Tennessee Department of Motor Vehicles and not the Tennessee Department of Revenue. All rights reserved. These fees are separate from the taxes and DMV fees listed above. For purchases in excess of $1,600, an additional state tax of 2.75% … According to It Still Runs, Tennessee cities and counties can charge a local sales tax of up to 2.75 percent on the first $1600 of a car's total purchase price. Many dealers offer cash incentives or manufacturer rebates on the sticker price of a vehicle in order to encourage sales. Tennessee law does not limit the amount of doc fees a dealer can charge. The maximum charge for county or city sales tax in Tennessee is $36 on the first $1600 of a car's purchase price. We may earn a commission for purchases made through our links. A single article tax is another state tax to consider when purchasing a car. Used Car Taxes and Fees for Out-of-State Purchases. If you have a trade-in, then the purchase price is the amount remaining after applying your old car's trade-in value to your new car's price. It's a 2.75 percent sales tax that's applied to the car's purchase price when it's over $1600 but not more than $3200. All new and used vehicle sales at dealerships and between private parties are subject to Tennessee car sales tax. If you don't have a trade-in, then the purchase price is the amount you agree to pay prior to any rebates or incentives. Budget better for your next car purchase when you estimate ahead of time how much Tennessee car sales tax you'll have to pay.