How Much are Used Car Sales Taxes in Arizona?
Arizona doesn’t charge sales tax on private-party car sales. Only on dealership cars, which is one more reason to buy from a private seller.
Even though you’re off the hook for state sales tax, you will owe other taxes and fees when you register the car and transfer the title.
Arizona Private-Party Taxation
When you buy a motor vehicle in Arizona from a private party—whether between family members or total strangers—you are exempt from paying the state’s 5.6% sales tax. Retail (dealer) sales are subject to the tax.
Arizona’s a bit unusual in this regard. Only Hawaii and Nevada join it in discriminating between private-party and dealership sales for tax purposes.
You’ll still have to pay Arizona’s vehicle license tax, registration, license, and vehicle title fees.
Arizona’s a bit unusual in this regard. Only Hawaii and Nevada join it in discriminating between private-party and dealership sales for tax purposes.
You’ll still have to pay Arizona’s vehicle license tax, registration, license, and vehicle title fees.
What is the Arizona Transaction Privilege Tax?
OK, when we said that Arizona has a 5.6% sales tax, there’s a bit more to the story. The state doesn’t have an official sales tax like other states have. Instead, it levies a “Transaction Privilege Tax (TPT)” on retail (dealership) vehicle sales. The TPT is a percentage of vehicle value, making it a sales tax in all but name.
Where most sales taxes are paid by the vehicle buyer, the TPT is paid by the seller (dealership). Naturally, dealers pass it on to the buyer in the form of higher prices, so the buyer really pays it in the end.
Where most sales taxes are paid by the vehicle buyer, the TPT is paid by the seller (dealership). Naturally, dealers pass it on to the buyer in the form of higher prices, so the buyer really pays it in the end.
What is Arizona Use Tax?
Use tax is a percentage of a car's purchase price owed to Arizona when a car is brought into the state for registration.
When purchasing a vehicle out-of-state, you will have to pay a 5.6% use tax when you register the car in Arizona—even if it’s a private-party transaction. On top of that, you may owe local sales taxes as well.
If you paid sales tax on car purchases in another state, Arizona deducts that tax so that you are not taxed twice. There are three potential scenarios (leaving out county taxes for simplicity).
1. You paid no sales tax in another state, in which case you owe the full 5.6% Arizona tax rate. 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.
When purchasing a vehicle out-of-state, you will have to pay a 5.6% use tax when you register the car in Arizona—even if it’s a private-party transaction. On top of that, you may owe local sales taxes as well.
If you paid sales tax on car purchases in another state, Arizona deducts that tax so that you are not taxed twice. There are three potential scenarios (leaving out county taxes for simplicity).
1. You paid no sales tax in another state, in which case you owe the full 5.6% Arizona tax rate. 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.
License Plates, Title, And Registration Fees in Arizona
Beyond sales taxes, you owe other fees when buying a car and registering it in Arizona, such as the vehicle license tax, registration fees, 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.
To learn more about the title transfer process, read our Arizona title transfer guide.
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.
To learn more about the title transfer process, read our Arizona title transfer guide.
What is VLT?
The Arizona vehicle license tax is an annual fee that every vehicle owner pays when registering a vehicle.
VLT is calculated by taking 60% of the manufacturer's base retail price and subtracting 16.25% for each year since the car was first registered in Arizona. For automobiles registered before August 1, 1998, the decrease is 15%.
The VLT rate for new automobiles is $2.80 per $100 of assessed value, whereas the rate for used vehicles is $2.89 per $100 of assessed value.
VLT is not a sales or property tax. It is a fee for the privilege of registering a vehicle in Arizona. The VLT revenue is used to fund transportation infrastructure and other government services. The proceeds from the VLT are divided among many entities.
VLT is calculated by taking 60% of the manufacturer's base retail price and subtracting 16.25% for each year since the car was first registered in Arizona. For automobiles registered before August 1, 1998, the decrease is 15%.
The VLT rate for new automobiles is $2.80 per $100 of assessed value, whereas the rate for used vehicles is $2.89 per $100 of assessed value.
VLT is not a sales or property tax. It is a fee for the privilege of registering a vehicle in Arizona. The VLT revenue is used to fund transportation infrastructure and other government services. The proceeds from the VLT are divided among many entities.
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The State Roads Fund receives 22.72% of VLT earnings, which is utilized for the building, maintenance, and operation of state roadways.
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14.38% goes to county roads, which are used for road building, maintenance, and operation.
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13.72% goes to city/town roads, which are used for road building, maintenance, and operation.
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24.59% goes to the county general fund and 24.59% to the city/town general fund, both of which can be used for any legitimate purpose.
VLT Examples
Here are three hypothetical examples of how VLT would be calculated in Arizona.
2015 Toyota Camry, 80,000 miles
Assessed value: the manufacturer's base retail price for a 2015 Toyota Camry is approximately $24,000. The assessed value would be 60% of that price, which is $14,400. The reduction for 6 years of usage is 16.25% x 6 = 97.5%.
So, the assessed value would be $360 ($14,400 - $14,040).
VLT: the rate for used vehicles is $2.89 per $100 of assessed value, so the VLT for this Toyota Camry would be $10.40 ($360 x 0.0289).
So, the assessed value would be $360 ($14,400 - $14,040).
VLT: the rate for used vehicles is $2.89 per $100 of assessed value, so the VLT for this Toyota Camry would be $10.40 ($360 x 0.0289).
2017 Honda Civic, 50,000 miles
Assessed Value: the manufacturer's base retail price for a 2017 Honda Civic is approximately $19,000. The assessed value would be 60% of that price, which is $11,400. The reduction for 4 years of usage is 16.25% x 4 = 65%.
So, the assessed value would be $3,990 ($11,400 - $7,410).
VLT: the rate for used vehicles is $2.89 per $100 of assessed value, so the VLT for this Honda Civic would be $115.31 ($3,990 x 0.0289).
So, the assessed value would be $3,990 ($11,400 - $7,410).
VLT: the rate for used vehicles is $2.89 per $100 of assessed value, so the VLT for this Honda Civic would be $115.31 ($3,990 x 0.0289).
2010 Ford F-150, 120,000 miles
Assessed value: the manufacturer's base retail price for a 2010 Ford F-150 is approximately $22,000. The assessed value would be 60% of that price, which is $13,200. The reduction for 12 years of usage is 16.25% x 12 = 195%.
VLT is set at a $10 minimum, so the Ford F1-50 owner will pay $10.
VLT is set at a $10 minimum, so the Ford F1-50 owner will pay $10.
How to Avoid Paying Sales Tax on Vehicles in Arizona?
You can avoid paying Arizona sales tax by buying your car from a private seller, instead of a dealership.
Make sure to protect yourself from scammers and fraudsters. PrivateAuto’s self-service platform allows you to deal with verified sellers, and we let you message inside our app without giving out your contact info. We also provide an instantaneous way for you to send money to the seller with no transfer fees and no exchange of financial information.
Make sure to protect yourself from scammers and fraudsters. PrivateAuto’s self-service platform allows you to deal with verified sellers, and we let you message inside our app without giving out your contact info. We also provide an instantaneous way for you to send money to the seller with no transfer fees and no exchange of financial information.
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.
We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. 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.
Buy directly from private sellers on PrivateAuto to avoid doc fees and get lower prices.
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Dealerships pay a 5.6% "Transaction Privilege Tax" when they sell a vehicle to you. Private sellers don't. Think the dealer will take the hit? No—they're passing that 5.6% on to you in the form of higher prices.
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Dealerships charge documentation fees. An average documentation fee in Arizona is $499.
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Used car dealerships already charge higher prices than private sellers in general. 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. 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.
Buy directly from private sellers on PrivateAuto to avoid doc fees and get lower prices.
Sales Tax in Arizona FAQ
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.