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Sales tax on an out-of-state private sale vehicle. I understand that in AZ, if you buy a vehicle from a private party, you don't pay sales tax when you register the car under your name.
State lawmakers are weighing a proposal by the Arizona Automobile Dealers Association to require anyone who sells a used car or truck to collect the state's 5.6 percent sales tax, the same as dealers have to.
If you buy from a private seller and not from a dealer, you do not pay sales tax to the seller since the private transaction is considered a casual sale. You pay the taxes when you register your car and title it in your name at the DMV.
In Arizona, the sales tax for cars is 5.6%, but some counties charge an additional 0.7%. Some cities can charge up to 2.5% on top of that. The other taxes specific to Arizona are the Title tax of $4, the Plate Transfer tax of $12 and the Registration tax of between $8 and $120.
Buying from Private Sellers The seller must provide the vehicle title signed and notarized. The buyer must complete an Arizona Title and Registration Application and pay the necessary fees and vehicle license tax. If there is a lien recorded on the vehicle title, the seller must provide a lien release form.
Tax obligation with you buy a car through a private sale When you purchase a vehicle through a private sale you must pay the associated local and state taxes. ... However, if you do not bring sufficient documentation, they may ask you to pay sales tax in your state, too.
Sales taxes on cars are often hefty, so you may try to avoid paying them. The easiest way to do so is to buy a car in a state with no sales taxes and register the car there. There are five states without sales taxes: Montana, Alaska, Delaware, Oregon and New Hampshire.
The law requires anyone in the business of selling vehicles to pay the transaction privilege tax, but since 1986, it exempts those who are not automobile dealers. Sparrow said Arizona is the only state where the question of the tax turns on whom the seller is.
It's actually on the sale itself. That's why it's called a sales tax. That car might keep getting traded in, and every time a dealer sells it, it's subject to sales tax. ... If you purchase something and do not pay sales tax, you are supposed to report it to your state and pay use tax.
Tax obligation with you buy a car through a private sale In most states, you'll need to bring your Bill of Sale and or signed title to the Department of Motor Vehicles (DMV) or motor vehicle registry agency to pay your taxes and obtain your registration, new title and plates.
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