How Much are Used Car Sales Taxes in Arizona?

When buying a used car in Arizona, don’t get caught off guard by the state’s vehicle sales tax. Arizona has a 5.6% statewide sales tax on vehicle purchases.

Quick links:

What is TPT?

How does Arizona calculate TPT?

How do I pay TPT?

Do I qualify for an exemption?

Is it better to go to a dealer?

Arizona sales tax calculator

Unlike many other states, Arizona doesn’t have local sales tax; 5.6% is the most car sales tax you’ll pay in Arizona.

Keep reading to get the full scoop on Arizona sales tax liabilities for your used car purchase.

Arizona calls their sales tax “Transaction Privilege Tax” (TPT). Don’t let the fancy name fool you: it’s a 5.6% tax on the purchase price of the vehicle. Because Arizona cities and counties don’t levy additional sales taxes, the 5.6% TPT is the most you’ll pay.

When buying a vehicle in Arizona, you’ll pay 5.6% of the vehicle’s purchase price, whether you purchase from a private seller or a car dealer. Arizona's tax law does not discriminate between the two.

Unless you qualify for a tax exemption (discussed below), you are required to pay tax on your vehicle purchase.

Arizona sales tax (TPT) and use tax are both similar. Each is a percentage of a car's purchase price owed to the state of Arizona when you buy a car and register it in Arizona.

• TPT is for cars purchased within the state.
• Use tax is for cars purchased outside the state and brought into the state for registration.

The vehicle use tax ensures that vehicles purchased within the state and cars brought into the state are taxed identically.

Use taxes apply when buying an out-of-state vehicle. When you purchase a car out-of-state and register it in Arizona, the state levies a 5.6% use tax, same as the TPT.

If you paid sales tax on the purchase of a vehicle in another state, Arizona deducts that tax so that you are not taxed twice. There are three potential scenarios.

1. You paid no sales tax in another state, in which case you owe the full 5.6% Arizona TPT. Let's say you bought a used car in Nevada and didn’t pay any sales tax, given Nevada’s 0% tax rate. You’ll pay Arizona ’s full 5.6% sales tax rate.
2. You paid less than 5.6% sales tax in another state, in which case Arizona charges you the difference. Let’s say you bought a used car in Utah for $23,000. Utah car sales tax rates are 4.85%, so you paid $1,115.50 (.0485 X $23,000) in Utah tax. When you go to register your car in Arizona, your total tax bill will be $1,334 minus the $1,115.50 you already paid in Utah, you can expect to pay $218.50 to Arizona.
3. You paid more than 5.6% in the other state (for example, California levies a 7.25% tax on every used vehicle purchase). We wish we could tell you Arizona will give you a refund, but no. At least they won’t charge you any more tax.

In addition to the state vehicle sales taxes, you owe other fees when buying a car and registering it in Arizona, such as a registration fee and a car title transfer fee.

To register your vehicle at the Arizona county tag office, you must show proof of car insurance. First-time registrations cost $8 plus the $4 title fee.

Arizona's standard license plate fee is included in the registration fee. A specialty plate costs an additional $25.

The transaction privilege tax is a percentage of a car's purchase price owed to the state of Arizona when you buy a car and register it in Arizona.

If the Arizona Department of Revenue (ADOR) suspects that the car price was artificially decreased, they will calculate sales tax based on the car’s fair market value, or the retail price of vehicles.

The Department of Revenue establishes what the car is worth on the open market by referring to Kelley Blue Book, NADA value, or other reliable sources on used car prices. If they conclude that the car's fair market value is greater than its purchase price, they can opt to base the TPT on the fair market value.

It is important to note that underreporting the purchase price of a vehicle in order to avoid paying sales tax is illegal.

Here's how to pay the TPT owed after buying a vehicle from a private seller in Arizona:

1. To transfer ownership of the vehicle, you and the seller must complete the necessary paperwork, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official Arizona bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). You'll need the following documents to transfer car ownership in a private transaction:
2. The original car title.
3. Proof of Arizona insurance.
4. Valid driver’s licenses or IDs
5. Calculate the amount of sales tax due. Multiply the vehicle's purchase price by 5.6%.
6. Fill out the sales tax form.
7. Submit payment for all taxes and fees.
8. Get payment proof from the Arizona Department of Revenue.
9. Get your registration, title, and new license plates. Once you've paid the sales tax and turned in the necessary documentation, you'll get your new registration and title for the car. The title and registration will show that you bought the car and that the sales tax has been paid. You will get your new license plates in mail.

If you buy a used car from a private seller, it is recommended that both you and the seller go to an Arizona Motor Vehicle Division (AZ MVD) branch to finish the transaction, which protects both of you.

Motor vehicle taxes are something you just can't avoid—they are a part of our lives. You are required by law to pay sales tax on private party used vehicle purchases in Arizona or any other state that charges sales tax—unless you meet an exemption.

Arizona Car Sales Tax Exemptions

Here are some sales tax exemptions for used car purchases in Arizona:

• Vehicles purchased by religious or charitable organizations
• Local, state, or federal government vehicles
• Vehicles for disabled individuals

Is Purchasing a Car from a Dealer Better?

A lot of people mistakenly believe that buying a car from an Arizona dealer saves money. The opposite is true: going to an Arizona dealer costs you more money, and it's a pain—unless spending 3 hours in an Arizona dealership is your idea of a good time.

• Dealerships charge documentation fees above and beyond all the other Arizona tax and fees you have to pay (the other taxes and fees are exactly the same whether you buy from a dealer or a private seller, by the way). An average documentation fee in Arizona is $499.
• Used car dealerships typically charge higher prices. Their business model is based on buying low and selling high to generate the spread that keeps them in business. To get the best deals, skip the middleman and go directly to private sellers.

We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. In fact, that’s why we exist. PrivateAuto gives you dealer-like convenience in the palm of your hand while allowing you to transact peer-to-peer with regular folks like yourself.

By shopping for used vehicles from private sellers on PrivateAuto, you avoid doc fees and get lower prices.

If you're in the market for a used vehicle, you'll want to calculate the applicable sales tax. With PrivateAuto's used car sales tax calculator, calculating sales tax has never been easier. This free online car sales tax calculator calculates the amount of tax you must pay on a used car purchase based on your sales tax rate (5.6%) and the vehicle's price.

PrivateAuto is the only transactional marketplace where you can buy and sell vehicles conveniently.

Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.

Here’s how you can sell your car in Arizona with a few simple steps:

1. Gather the required paperwork for selling a car in Arizona
2. Register on PrivateAuto and get verified
3. List your car
4. Set your terms
5. Vet incoming offers
6. Choose a buyer
7. Schedule a meeting
8. E-sign documents
9. Get paid, instantly
10. Transfer title

Which state has the cheapest sales tax on car sales?

The states with the cheapest car tax are Alaska, Delaware, Montana, New Hampshire, and Oregon, with a tax rate of zero. Nevada has a zero tax rate on private-party car sales, though not on dealership purchases.

With the exception of the above states, all US states charge sales tax on private-party car purchases. Oklahoma, North Carolina, Colorado, and Alabama charge 4.5% or less vehicle sales tax.

What is the Arizona DOT?

The Arizona Department of Transportation (ADOT) is responsible for managing Arizona's transportation system, while the MVD is a division of ADOT that handles driver and vehicle services.

What is the tax rate in Mohave County?

Since Arizona has no additional county and city sales tax, the tax rate in Mohave County is 5.6%, same as anywhere else in Arizona.

Does Arizona offer digital license plates?

Yes, digital license plates are available in the state of Arizona. Only ADOT-approved digital license plate display devices are allowed. The license plate number will still be assigned by the MVD.

How much is the registration late fee in Arizona?

The initial fee for a late registration is $8, plus $4 for each month it is late. Renewal notices are mailed or emailed to the owner 45 days before the registration expires.

Does Pinal County charge county sales tax?

Pinal County doesn't charge county tax. Counties in Arizona don't change any additional vehicle sales tax.

How can I find a used car for sale near me?

PrivateAuto is the best place to find the used vehicle of your dreams.

Here is how you can find your dream car in just a few simple steps:

1. Browse used vehicles for sale on PrivateAuto.
2. Look at the top of the page for the "Filter by Location" button. There, you will enter your location.
3. Set a search radius, such as 25, 50, or 100 miles.
4. You can make your search even more specific by choosing more filters, such as make, model, year, price range, trim, and other criteria.
5. When you click "Search," a list of all the vehicles that match your search criteria will appear.

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