NEWS & INSIGHTS

Motor Vehicle Sales Tax Rates by State 2025

January 22, 2025

Motor Vehicle Sales Tax Rates by State (As of January 15, 2025)

Florida law provides specific guidelines for the taxation of motor vehicles sold within the state, particularly those sold to nonresidents. This guide outlines how sales tax is applied, credits for taxes paid to other states, and exemptions that may be available. Additionally, a detailed chart is included to reference the sales tax rates and policies by state. This article include the most recent information from the Florida Department of Revenue’s TIP 25A01-01 issued on January 15, 2025.

Motor Vehicles Sold in Florida to Residents of Another State

Partial Sales Tax Exemption

Florida offers a partial sales tax exemption on the sale of a motor vehicle to a resident of another state. The tax amount collected is based on the purchaser’s home state’s tax rate if the vehicle were purchased there.

If the home state tax rate is 6% or higher: Florida collects a 6% sales tax.
If the home state tax rate is below 6%: The purchaser may claim a partial exemption by completing Form DR-123 (Affidavit for Partial Exemption of Motor Vehicle Sold to a Resident of Another State). This form must be completed at the time of sale.

Nonresident purchasers must license the vehicle in their home state within 45 days to maintain eligibility for the partial exemption. Importantly, there is no requirement for the vehicle to be removed from Florida within this period.

Exceptions for Nonresident Entities

The partial exemption does not apply to corporations or partnerships with a Florida-resident officer, stockholder, or partner holding 10% or more ownership. However, the exemption may be granted if the vehicle is removed from Florida within 45 days and remains outside the state for a minimum of 180 days.

States with Special Provisions

Certain states, such as Arkansas, Mississippi, and West Virginia, impose additional taxes on motor vehicles purchased in Florida without allowing a credit for taxes paid to Florida. Oklahoma residents, for instance, must pay taxes to both Florida and their home state but can seek a refund for the amount paid to Florida, up to their Oklahoma tax liability.

Motor Vehicles Purchased in Another State and Brought into Florida

Florida imposes a 6% use tax on motor vehicles purchased outside the state and subsequently registered in Florida. A credit is allowed for a like tax paid to another state, district, or U.S. territory.

If the tax paid is equal to or greater than Florida’s rate: No additional tax is due.
If the tax paid is less: The difference is owed to Florida.

Vehicles used outside Florida for six months or more before being brought into the state are presumed to have been purchased for use outside Florida and are generally exempt from Florida’s use tax.

State-by-State Motor Vehicle Tax Rates

State	State Sales Tax Rate	Credit Allowed by Florida for Tax Paid in Another State	Exemption for Occasional or Isolated Sales	Comments
Alabama	2%	Yes	No	Tax calculated on sales price minus trade-in value when sold through a dealer.
Alaska	None	No	N/A	No state sales tax; local taxes may apply.
Arizona	5.6%	Yes	Yes	Trade-in credit allowed.
Arkansas	6.5%	Yes	No	Reduced rates for certain used vehicles based on price thresholds.
California	7.25%	Yes	No	No trade-in credit allowed; transfers to revocable trusts or family members may be exempt.
Colorado	2.9%	Yes	No	Trade-in credit allowed.
Connecticut	6.35% / 7.75%	Yes	No	Rates vary based on sales price and vehicle type.
Delaware	None	Yes (for document fees)	N/A	Excise tax on vehicle titles applies instead of sales tax.
Florida	6%	N/A	N/A	State tax applied uniformly unless partial exemption is claimed.
Georgia	None for titled vehicles	Yes (non-motorized vehicles)	Yes	Title Ad Valorem Tax (TAVT) applies instead of sales tax for motorized vehicles.
Hawaii	4%	Yes	Yes	Trade-in credit allowed.
Idaho	6%	Yes	No	Trade-in credit allowed for dealer transactions.
Illinois	6.25%	Yes	No	Private Party Vehicle Use Tax tables determine tax on used vehicles based on age and price.
Indiana	7%	Yes	No	Trade-in credit allowed.
Iowa	5%	Yes	No	One-time fee based on vehicle price.
Kansas	6.5%	Yes	No	Local taxes may apply in addition to state rate.
Kentucky	6%	Yes	No	Tax applies to vehicle registration, not sales price.
Louisiana	4.45%	Yes	No	Local taxes significantly impact the total tax rate.
Maine	5.5%	Yes	No	Trade-in credit allowed.
Maryland	6%	Yes	No	Excise tax applies instead of sales tax for vehicle sales.
Massachusetts	6.25%	Yes	No	Sales tax applies to the greater of purchase price or book value.
Michigan	6%	Yes	No	Trade-in credit allowed.
Minnesota	6.5%	Yes	No	Motor vehicle sales tax applies separately from general sales tax.
Mississippi	5%	Yes	No	Trade-in credit allowed.
Missouri	4.225%	Yes	No	Local taxes may apply in addition to state rate.
Montana	None	No	N/A	No state sales tax; registration fees apply.
Nebraska	5.5%	Yes	No	Local taxes may apply.
Nevada	6.85%	Yes	No	Trade-in credit allowed.
New Hampshire	None	No	N/A	No state sales tax; registration fees apply.
New Jersey	6.625%	Yes	No	Trade-in credit allowed.
New Mexico	4%	Yes	No	Local taxes may apply.
New York	4%	Yes	No	Local taxes may apply; trade-in credit allowed.
North Carolina	3%	Yes	No	Highway Use Tax applies instead of sales tax.
North Dakota	5%	Yes	No	Trade-in credit allowed.
Ohio	5.75%	Yes	No	Local taxes may apply.
Oklahoma	3.25%	Yes	No	State excise tax applies separately.
Oregon	None	No	N/A	No state sales tax; registration fees apply.
Pennsylvania	6%	Yes	No	Local taxes may apply.
Rhode Island	7%	Yes	No	Trade-in credit allowed.
South Carolina	5% (capped at $500)	Yes	No	Maximum tax cap applies to motor vehicle sales.
South Dakota	4.5%	Yes	No	Excise tax applies instead of sales tax for vehicle sales.
Tennessee	7%	Yes	No	Local taxes may apply.
Texas	6.25%	Yes	No	Trade-in credit allowed.
Utah	4.85%	Yes	No	Trade-in credit allowed.
Vermont	6%	Yes	No	Trade-in credit allowed.
Virginia	4.15%	Yes	No	Motor Vehicle Sales and Use Tax applies separately from general sales tax.
Washington	6.5%	Yes	No	Local taxes may apply.
West Virginia	6%	Yes	No	Motor vehicle sales tax applies separately from general sales tax.
Wisconsin	5%	Yes	No	Trade-in credit allowed.
Wyoming	4%	Yes	No	Local taxes may apply.

References

Sections 212.06(7), 212.06(8)(a), and 212.08(10), Florida Statutes

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Jeanette Moffa, Esq.

(954) 800-4138
[email protected]

Jeanette Moffa is a Partner in the Fort Lauderdale office of Moffa, Sutton, & Donnini. She focuses her practice in Florida state and local tax. Jeanette provides SALT planning and consulting as part of her practice, addressing issues such as nexus and taxability, including exemptions, inclusions, and exclusions of transactions from the tax base. In addition, she handles tax controversy, working with state and local agencies in resolution of assessment and refund cases. She also litigates state and local tax and administrative law issues.

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