![]() Unlike some other states, in Virginia, they apply the sales tax to the full price of the car before any credits from trade-ins are applied. For example, you could trade in your old car for a $5000 credit and then use that money to be put towards a new, $10,000 vehicle, lowering your out-of-pocket cost to just $5000. Trade-ins: Trade-ins are an incentive often offered by dealerships in which you can essentially swap out your old vehicle in exchange for a credit that the dealer then applies to a new car.For example, a $2000 cash rebate may be offered for purchasing a $12,000 car, making the buyer's out-of-pocket cost just $10,000. Manufacturer incentives and rebates: According to the Sales Tax Handbook, in order to encourage sales, many dealers offer rebates and cash incentives.They base the motor vehicle sales and use tax in Virginia on the gross sales price of the vehicle, including the dealership's processing fees.ĭealerships often offer various incentives for purchasing a vehicle, such as: They collect this motor vehicle sales and use tax when there is a change in the vehicle's ownership, such as when it's sold, at the time of titling. The Virginia Department of Motor Vehicles states that there is a 4 percent sales tax rate for any vehicle that you purchase within state lines, with the minimum sales tax for purchased vehicles being $75. However, even with the car tax, Virginia still has one of the lowest tax burdens. In all, there are twenty-four states (and the District of Colombia) that do not have to pay a car tax, including: The local and state government are also able to offer exemptions to certain people and vehicles, such as: This process is separate from the vehicle registration that you will need to complete with the Department of Motor Vehicles. Penalties may also apply if you fail to register your car with the respective county or city within 60 days of purchase. However, vehicle owners can challenge these estimates due to any issues with the car or the number of miles that it has.Įven if you would like to contest a Virginian jurisdiction's estimated value for your car, it's important that you remain mindful of the deadline so that you can avoid any penalties. Most of Virginia's jurisdictions use the National Automobile Dealers Association Official Used Car Guide to determine the suggested retail price for both new and older vehicles. These property taxes are considered separate from the sales taxes that are placed on vehicles and other purchases. This has resulted in some people attempting to illegally avoid taxation by registering their cars in other states.Įach city and county regulates its own rate for personal property taxes. Who Has to Pay the "Car Tax" in Virginia?Īccording to WTOP News, in the state of Virginia, a car qualifies for taxation if it is registered to an address in the respective county or city and/or if the owner regularly parks it in a specific jurisdiction. It's important that you are aware of the true cost of owning a vehicle before buying one. When purchasing a vehicle, there are Virginia sales taxes on cars and fees that you will be responsible for paying.
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