Are you planning to purchase a car in Arizona? You may have saved money to buy a new or used car. But you must be mindful that the sales tax rate can affect the cost of your car, and each state has a different tax rate. So, knowing about Arizona car sales tax is vital before buying your dream car!
Well, sales tax in AZ on cars can get quite expensive as the rate can change based on the city and county you buy the car from. Also, you may incur additional costs in the form of the car title, registration, and plate. So, plan in advance to avoid getting unpleasantly surprised by your area’s sales tax rate. Our article will give you detailed info about Arizona car sales tax!
How much is the sales tax on a car in AZ?
The state charges a sales tax rate of 5.6% on purchasing all cars. But the Arizona car sales tax varies based on the city and county from which you purchase the car. Expect the city tax rate to go as high as 2.5% and the county tax to be around 0.7%.
For instance, if you live in counties like Santa Cruz or Mohave, you pay the lowest combined tax rate of 8.6%. However, counties like Pinal County and Pima County have the highest combined rates, with 11.2% and 11.1%, respectively.
Are trade-ins and refunds subject to Arizona car sales taxes?
Yes. A trade-in is an option to evade paying AZ car sales tax. You can save money on the difference because most dealers will let you trade in your old car for a credit to your new one.
Assume you want to drive around the city roads in a car that costs around $25,000. If you have a trade-in of around $5,000, you’ll get a $5,000 credit toward your new car, decreasing the total price to around $20,000. So, instead of paying the entire cost of the new model, you will only pay the combined sales tax on the $20,000 cost.
Dealer incentives and rebates
Some dealers also provide financial incentives or manufacturer rebates on the buying price of a car. For example, if the dealer provides a $2,000 cash rebate on a $20,000 car, the buyer must pay only $18,000 from his wallet. Arizona car sales tax gets charged after giving incentives and rebates, so the buyer needs to pay the tax as if the car costs $18,000.
What other fees must you pay while buying a car in Arizona?
Other than the state and local car sales taxes, car buyers in the state will have to bear extra fees and taxes. These fees are not like sales taxes and will be collected by the Arizona Department of Motor Vehicles rather than the Arizona Department of Revenue.
- Title fees: $4
- Registration fees: $8-$120
- Plate transfer cost: $12
Dealerships may also charge you for documentation fees. The fee covers the cost of completing and filing the sales contract, sales tax forms, and others. These fees are extra to the taxes and DMV fees mentioned above. On average, car buyers pay nearly $410 as a documentation fee. Because these dealerships fix this amount, they might differ from one dealership to the next or between cars.
When you’re exempt from AZ car sales tax?
In some conditions, you won’t even have to pay Arizona car sales tax on your car. You will be exempt from paying the tax if the following situations apply.
- You work as a health officer.
- You work for a charitable or religious group.
- The car you own is an electric one.
- You are the survivor of a fallen military person.
- As a tribal member, you live on a reservation.
- You’ve been widowed or become disabled.
- You are a veteran military member or actively on duty.
Do I have to pay sales tax in AZ on used cars?
Yes. You must pay if you’re buying the car via a dealership.
How much is the sales tax on a used car in Arizona?
In AZ, buying used cars charge the same Arizona car sales tax as a new car. Therefore, you’ll be charged a tax of 5.6%. Add your local or county sales tax to the sticker price to calculate your car’s total combined sales tax.
Do I have to pay sales tax on a gifted car in Arizona?
No. You do not have to pay AZ car sales tax on a gifted car if marked as a gift on Form REG 256.
How can I avoid paying Arizona car sales tax?
The best way to evade paying taxes is by getting the car as a gift. Also, active military personnel and veteran members get an exemption on tax.
In Arizona, you can save money on sales tax by purchasing a car in a county with a lower county sales tax. You might also try buying the car from a private owner.
Know about how to find cheap car insurance quotes in AZ!
What is the car sales tax in Maricopa, AZ?
The sales tax rate for Maricopa County is 8.6%. It is the combined sum of the Arizona state sales tax rate of 5.6%, Maricopa County’s sales tax rate of 0.7%, and Phoenix City’s rate of 2.3%.
What is the car sales tax in Phoenix, AZ?
It is 7.9%. It is the combined sum of the Arizona state sales tax rate of 5.6% and Phoenix City’s rate of 2.3%.
What is the sales tax on a car in Scottsdale, AZ?
The minimum combined 2023 sales tax rate of Scottsdale is 8.05%. It is the sum of the sales tax rate in Arizona of 5.6%, the county’s tax rate of 0.7%, and Scottsdale’s rate of 1.75%.
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