What is Sales Tax on Cars in TN?
When purchasing a vehicle in Tennessee, it’s essential to understand the sales tax implications. In this article, we’ll delve into the details of sales tax on cars in TN, covering rates, exemptions, and how it affects your purchase.
What is Sales Tax on Cars in TN?
In Tennessee, sales tax is a 6.5% state rate, which is applied to the total purchase price of a vehicle. This rate applies to all new and used vehicles, as well as motorcycles, recreational vehicles, and other types of motorized equipment.
How is Sales Tax Calculated on Cars in TN?
Sales tax on cars in TN is calculated using the following formula:
Total Purchase Price x Sales Tax Rate = Total Amount Due
For example, let’s say you purchase a new car for $30,000. The sales tax rate in TN is 6.5%. To calculate the sales tax:
$30,000 x 0.065 = $1,950
The total amount due would be the purchase price of the car plus the sales tax: $30,000 + $1,950 = $31,950
Sales Tax Exemptions on Cars in TN
While the 6.5% sales tax rate applies to most vehicles, there are certain exemptions and deductions available in Tennessee. These include:
• Used Cars: Sales tax is exempt on used cars purchased from individuals, not dealerships.
• Commercial Vehicles: Vehicles used for business purposes may be eligible for a reduced sales tax rate or exemptions.
• Historic Vehicles: Vehicles 20-30 years old may be eligible for exemptions.
• Disability-Related Vehicles: Vehicles modified for individuals with disabilities may be eligible for exemptions.
Additional Fees on Cars in TN
In addition to sales tax, there are other fees you may need to pay when purchasing a vehicle in Tennessee. These include:
• Title Transfer Fee: $27.50 (new vehicles) or $17.50 (used vehicles)
• Registration Fee: $24.50 (new vehicles) or $14.50 (used vehicles)
• Lien Record Fee: $10.00
• Flood and Storm Damage Disclosure: $10.00
Summary of Sales Tax on Cars in TN
Here’s a summary of the sales tax rates and fees you can expect when purchasing a vehicle in Tennessee:
Category | Sales Tax Rate | Additional Fees |
---|---|---|
New Vehicles | 6.5% | $27.50 (Title Transfer), $24.50 (Registration) |
Used Vehicles | 6.5% | $17.50 (Title Transfer), $14.50 (Registration) |
Used Vehicles (Individual Sale) | 0% | N/A |
What to Do if You’re Having Trouble with Sales Tax on Cars in TN
If you’re having trouble calculating sales tax or navigating the tax exemption process, consider the following options:
• Consult with a Car Dealer: Dealerships have experience with sales tax and can guide you through the process.
• Contact the TN Department of Revenue: The department provides tax guidance and can answer questions about specific situations.
• Consult with an Attorney or Tax Professional: If you’re unsure about your specific situation or need legal guidance, consider consulting with an attorney or tax professional.
By understanding sales tax on cars in TN, you can better prepare for the costs associated with vehicle ownership. Remember to factor in the 6.5% sales tax rate, as well as additional fees and possible exemptions, to ensure a smooth and financially stress-free purchase.