The Texas Car Sales Tax: How Much Is It & How You Can Pay
If you’re in the market for a new or used vehicle, it’s important to factor in the cost of sales tax to your budget. Whether you purchase from a dealership or a private seller, you’ll need to pay the Texas car sales tax. The 6.25% tax is calculated based on the purchase price or the standard presumptive value and can add hundreds to thousands to the total price you pay.
In this post, we’ll cover everything you need to know about car sales tax in Texas, from standard presumptive value, to rates and how to pay the tax.
The Buying A Car In Texas Guide Texas Vehicle VIN Checks
Texas Vehicle Presumptive Values
In the Lone Star State, anyone who purchases a motor vehicle must pay the Texas car sales tax. For vehicles purchased from a private seller, this tax is based on the vehicle’s standard presumptive value (SPV) or the purchase price, whichever is higher. The SPV is calculated based on similar sales in the region. You can preview the vehicle’s SPV on the Texas DMV website to estimate the sales tax you will owe. The county tax office will calculate the exact sales tax when you apply for a title transfer and registration.
If purchasing through a dealership, you will only need to pay tax based on the purchase price, not the SPV. Other vehicles that are exempt from SPV include:
- New vehicles
- Vehicles purchased at government or foreclosure auctions
- Vehicles older than 25 years
- Off-road vehicles
- Salvage/abandoned vehicles
- Vehicles sold through a mechanic or storage lien
- Vehicles given as gifts
- Even-trade vehicles (when owners swap vehicles that are of the same value)
If the purchase price was less than the SPV, you can get an appraisal to pay tax on the appraised value. However, the appraisal must be certified by a licensed insurance adjuster or dealer within 20 working days of the purchase.
What Is the Texas Car Sales Tax Rate?
In Texas, the sales tax rate for vehicle purchases is 6.25% of the purchase price or SPV. If you traded in a vehicle, you will receive a credit for the amount of Texas car sales tax you owe.
If you purchase the vehicle in another state, you will pay a use tax instead of sales tax. The rate is 6.25% of the sales price, minus a credit for the sales tax you paid in the other state. New residents who previously registered the vehicle in another state or country pay a $90 new resident tax instead of the use tax.
For gifted or even trade vehicles, there is no sales tax. However, you’ll need to pay a $10 tax if the vehicle was gifted and a $5 tax for an even trade.
Who Pays It?
The person purchasing the vehicle is responsible for paying the sales tax. If you purchase from a private seller, you have 30 days from the purchase to pay the tax. If you purchase from a dealership, you pay the tax to them, and the dealership will handle remitting the payment to the county tax office for you.
Texas Out Of State Car Registration
How Do You Pay It?
Texas car sales tax is paid when you are titling and registering your car. If you purchase through a dealership, they will typically process your title and registration for you, using the TxDMV webDEALER system.
If you purchased from a private seller or out of state, or you are a new resident, you’ll need to pay the appropriate fees at the local county tax office. They will calculate the sales tax you owe and process your registration and titling.
When Is It Due?
Texas car sales tax is due:
- Within 30 days of purchasing from a private seller.
- Within 30 days of bringing the vehicle to Texas from another state.
- Within 60 days of purchase or use in Texas for active duty military personnel.
- When a gifted or even exchange vehicle is titled.
- Within 30 days of purchase of a vehicle that weighs more than 11,000 pounds, if the dealer didn’t collect the tax payment.
Title and Registration Requirements
To title and register your vehicle, you’ll need to head to your local county tax office. Fill out the Application for Texas Title/or Registration (Form 130-U), with a signature from the purchaser. Bring proof of ownership, proof of insurance, and the signed vehicle title with you. If you live in one of the counties that require an emissions test, you’ll need to bring a copy of the Vehicle Inspection Report. Submit your payment with the application and documents.
Penalties for Late Payment
If you’re late in paying your Texas car sales tax, it’s going to cost you. For payments 1 to 30 days late, you’ll pay a 5% penalty. For payments more than 30 days late, you’ll pay a 10% penalty.
Texas Car Sales Tax Conclusion
Anyone who purchases a car in the state owes a 6.25% Texas car sales tax. The amount is calculated based on the price you paid for the vehicle or the Standard Presumptive Value, whichever is higher. However, if you purchase from a dealership, you’ll only pay on the purchase price, even if the SPV is higher.
If you’re in need of a new vehicle, come check out Tipton Hyundai in Brownsville. We serve customers all over the state, including Harlingen, McAllen, Mission, and even ship to Dallas and San Antonio. Come see our inventory of new and used vehicles to see why we stand out from the rest!
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