Guide to Sales Tax When Purchasing a Used Tesla

Sep 12, 2019   

Some states offer benefits on the sale of used vehicles that can make buying a used Tesla private party a financially-savvy decision.

States with Sales Tax Exemptions

Arizona doesn’t charge sales tax on a private party vehicle transaction. Compared to purchasing from a dealer, this saves buyers from paying the state’s 5.6% rate as well as additional rates based on the buyer’s county and city.

New Jersey has a sales tax exemption on all emission-free vehicles, including Tesla’s entire lineup.

The District of Columbia (Washington, D.C.) also has a sales tax exemption on electric vehicles.

Oregon charges a 0% tax rate on used vehicles.

Nevada doesn’t charge sales tax on private party vehicle sales, which saves buyers from paying a 8.25% tax rate.

Alaska: 0% (+ municipality when applicable)

Montana: 0%, period.

New Hampshire: 0%, period.

States with Sales Tax Benefits

Illinois charges a Private Party Vehicle Use Tax, which is based solely on the vehicle’s model year. As of 2019, this can range from $390 for a vehicle with a 2018 model year to as low as $90 for a vehicle with a 2013 model year. For future reference, vehicles that are 11 years or older are only subject to a $25 tax. This compares to the state’s 6.25% tax rate, which is 1.25% higher in Chicago.

Florida has a sales tax exemption for out-of-state buyers (other than residents of Arkansas, Mississippi, and West Virginia), which limits sales tax to 6% regardless of where the car is registered.

New York limits sales tax to a maximum of $725.

South Carolina limits sales tax to $500.

Tennessee only collects sales tax on the first $3200 of the vehicle’s value.

California charges out-of-state buyers sales tax when a vehicle is purchased new from a dealer regardless of where the vehicle is registered; however, they don’t collect sales tax from out-of-state buyers on private transactions.

Sales Tax Guide for All Other States

Most states typically charge sales tax on the vehicle’s declared value based on where the vehicle is ultimately registered. (Please consider this as a rough guide. We encourage buyers to check their local state’s DMV site for up-to-date information.)

Alabama: 2% + county rate + city rate
Arkansas: 6.5%
California: 7.25% + local rate
Colorado: 2.9% + county rate + city rate + district rate
Connecticut: 6.35% (7.75% of vehicles over $50,000)
Delaware: 4.25%
Florida: 6%
Georgia: 4% + county
Idaho: 6%
Indiana: 7%
Iowa: 5%
Kansas: 6.5% + local rate
Kentucky: 6%
Louisiana: 4.45% + local rate
Maine: 5.5%
Maryland: 6%
Massachusetts: 6.25%
Michigan: 6%
Minnesota: 6.5%
Mississippi: 5%
Missouri: 4.225% + local rate
Nebraska: 5.5% + city or county rate
New Mexico: 4%
New York: 4% + local rate
North Dakota: 5%
Ohio: 5.75% + local rate
Oklahoma: $20 on the first $1,500 + 3.25%
Pennsylvania: 6%
Rhode Island: 7%
South Carolina: 5%
South Dakota: 4%
Tennessee: 10%
Texas: 8.25%
Utah: 8.6%
Vermont: 6%
Virginia: 4.15%
West Virginia: 7%
Wisconsin: 5% + county rate
Wyoming: 4% + county rate

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