While buying a used car in Idaho is a great way to save some money, there's one thing you can't overlook—sales tax.
The statewide rate for used car sales tax in the state of Idaho is 6% of the vehicle’s purchase price. You may owe additional local tax as well.
Keep reading to get the full scoop on Idaho sales tax liabilities for your used car purchase.
Do you Pay Taxes When you Purchase a Vehicle From a Private Party in Idaho?
When buying a car in Idaho, you’ll pay 6% of the vehicle’s purchase price, whether you buy from a private seller or a car dealer. Idaho tax law does not discriminate between the two.
In addition to the 6% Idaho state sales tax on car purchases, local governments (cities and counties) often charge additional sales taxes and fees.
Discretionary Sales Surtax
Some Idaho counties charge their own sales tax, called a "discretionary sales surtax," which is added to the state’s 6%.
Let’s use an example to make this more understandable.
Say you're in Bannock County, Idaho, and you find a stunning 2020 Jeep Wrangler for $45,000.
You’ll owe $2,700 in state sales tax ($45,000 multiplied by .06). Bannock County’s surtax is 2%. This means you'll owe an additional $900 in county surtax ($45,000 multiplied by .02).
Now, let's tally up the total tax. You have the $2,700 state sales tax, and the $900 county surtax, for a grand total of $3,600.
County Surtaxes in Idaho
Here’s an overview of the counties that have surtaxes, along with their respective car sales tax rates:
Some counties—for example, Adams, Clark, Gooding, and Twin Falls—have no surtax, so you'll only owe 6% Idaho state tax.
The discretionary sales surtax is determined by the county in which you live and plan to register the car, not by the county in which you bought the car.
Sales Tax vs Use Tax
Sales tax is a percentage of a vehicle’s purchase price, due to the state of Idaho when you purchase a vehicle and register it in Idaho.
Now, let's talk about use tax. Use tax comes into play when you purchase a vehicle outside of Idaho but intend to register and use it in the state. If you didn't pay any sales tax (or paid less than Idaho's standard rate) at the time of purchase, you might owe a use tax when you register the car in Idaho. It basically levels the playing field and makes sure that cars bought in the state and cars brought into the state are taxed the same way.
The use tax rate is equal to the sales tax rate, which means you'll pay 6% state tax plus any Discretionary Sales Surtax required by the county you’re registering the vehicle in. If you paid sales tax in the state where you purchased the vehicle, you can typically receive a credit for that amount, avoiding double taxation. However, if the tax you paid in the other state is less than Idaho's rate, you'll need to pay the difference as use tax when you register the vehicle in Idaho.
Let's say you bought a used car in Montana and didn’t pay any sales tax, given Montana's 0% tax rate. You want to register the car in Idaho. You’ll pay 6% sales tax plus any applicable county surtax.
To report sales and use tax, fill out the self-assessed use tax return and instructions (Form 850-U).
Registration, Title, and License Fees in Idaho
In addition to the state and county sales tax, other fees are involved with buying a car, such as registration fees and car title fees.
To register your vehicle at your local assessor's motor vehicle office, you must show proof of insurance. The first time you register and title a vehicle, it will cost you from $45 to $69, depending on your vehicle's model year. This doesn't include the title transfer fee of $14.
Standard license plates in Idaho cost $25, which is included in the registration fee. You can customize your plates with special characters or a slogan, for which you’ll pay an additional $25.
How is Used Car Sales Tax Calculated in Idaho?
Sales tax in Idaho is calculated based on the vehicle's purchase price. There are people who think they can outsmart the government by negotiating a low "official" purchase price and paying the rest in a side transaction. But the Idaho State Tax Commission can’t be fooled so easily.
If tax commissioners suspect that the purchase price of the vehicle was artificially decreased, they will calculate sales tax based on the car’s fair market value.
The tax commission establishes what the car is worth on the open market by referring to Kelley Blue Book or other reliable sources on used car prices. If the tax commissioners conclude that the car's fair market value is greater than the price you paid for it, they can slap you with a tax bill based on the market value.
How to Pay Idaho Vehicle Sales Tax
How to Pay Idaho Vehicle Sales Tax
Here's how to pay car sales tax in Idaho after purchasing a used car from a private party:
- You and the seller must complete the necessary paperwork to transfer ownership of the vehicle, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official Idaho bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). To transfer car ownership in a private transaction, you’ll need the following documents:
- The original car title with an odometer reading and the seller’s signature
- Proof of valid Idaho insurance
- The buyer and the seller’s valid driver’s licenses or IDs
- Calculate the amount of sales tax due depending on the state sales tax rate plus your county’s discretionary surtax. If you live in Ketchum, your total sales tax is 9% (6% for Idaho, 3% for Blaine County). Multiply the vehicle's purchase price by your total tax rate.
- Fill out the self-assessed use tax return and instructions (Form 850-U).
- Submit payment for all taxes and fees.
- Get payment proof from the Idaho Transportation Department.
- Get your registration, title and new license plates. Once you've paid the sales tax and turned in the necessary paperwork, 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 also get your license plates in mail.
If you buy a used car from a private seller, the Idaho Transportation Department recommends that both you and the seller go to a vehicle service center to finish the transaction, which protects both of you. If you do not complete the transfer of title within 30 days of the sale, you will be charged a late transfer penalty fee.
How to Avoid Paying Sales Tax on a Car in Idaho?
There’s really no way around it—property taxes, income taxes, sales taxes, and other taxes are part of life. You are required by law to pay sales tax on private used car purchase in Idaho or any other state that charges sales tax—unless you meet an exemption.
Idaho Car Sales Tax Exemptions
Here are some sales tax exemptions for used vehicle purchases in Idaho:
- Transfer between immediate family members.
- If a vehicle is gifted to someone without any consideration or compensation involved.
- Non-residents who purchase a vehicle in Idaho but plan to register and use it in another state.
- Vehicles purchased by qualified non-profit organizations for their tax-exempt purposes.
- Purchases of vehicles by government agencies, such as federal, state, and local government entities.
- The sales tax exemption may be available for certain commercial vehicles used for specific purposes, such as farm trucks or commercial trailers.
The buyer must provide a completed sales tax resale or exemption certificate, capital asset transfer affidavit, and instructions (Form ST-133 CATS) when registering the vehicle.
Is Purchasing a Car from a Dealer Better?
Many people believe that buying from a car dealer is a magical way to avoid all of the hassle (and possibly a fee here and there). In fact, going to a dealer will cost you more money, and it's not that hassle free.
- Dealerships charge a documentation fee above and beyond all the other taxes and fees you have to pay (which are exactly the same whether you buy from a dealer or a private seller). Dealership fees in Idaho can run as high as $265.
- Dealers usually charge higher prices on used cars. Their business model is based on buying as low as possible and selling as high as possible to make the spread that keeps them in business. Cut out the middleman and go directly to private sellers to get the best deals.
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 PrivateAuto exists. We give you dealer-like convenience in the palm of your hand while allowing you to transact peer-to-peer with regular folks like yourself—unlike our competitors.
Avoid the doc fee and get lower prices when you shop used cars from private sellers right here on PrivateAuto.
Idaho Vehicle Sales Tax Calculator
If you're looking for a used car, you'll need to figure out how much local sales tax you'll have to pay. While it is not necessary to be a rocket scientist to calculate taxes, it can be time-consuming to determine your total sales tax amount.
Using PrivateAuto's used car sales tax calculator, calculating sales tax has never been simpler. This free online tool calculates how much tax you must pay on a used car purchase based on where you live and the car's purchase price.
Anyone can become a tax expert with our car sales tax calculator.
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 Idaho with a few simple steps:
Gather necessary documentation
You’ll need your vehicle title and other documentation. Have all the paperwork you need to sell your car privately, so you’re not scrambling to find it at the moment of completing a sale.
Register on PrivateAuto and get verified
To make PrivateAuto a safe place for everyone, we require email, phone, and driver’s license verification, including facial recognition.
List your car
Easily create your PrivateAuto listing with our step-by-step guide. Bonus: we include a window brochure with a QR code scannable to your listing.
Set your terms
You can control where, when, and who you meet. Decide whether to accept only ID-verified buyers, or buyers with verified funds. Don’t waste your time with buyers who aren’t verified according to your preferences.
Vet incoming offers
Manage offers in one place with the ability to accept, reject, or counter offers within the app. Listing on multiple sites? Filter all communications through PrivateAuto by sharing your listing link on all platforms. Your personal information is protected: no more giving out your phone number or email address. All communication happens in our app.
Choose a buyer
When you find an offer you like, accept it and proceed to the next step with that buyer.
Schedule a meeting
The buyer will want to look at your car. No more back-and-forth texts. You never have to give out your phone number. Rather, use our handy scheduling feature to schedule test drives and coordinate a time and place for meetings. (Oh, and you’ll be able to finalize the transaction instantly at the first meeting, FYI.)
After the buyer is satisfied with your car and the two of you have agreed on a purchase price, you can easily e-sign the bill of sale within our app, from your phone. With our shared documents feature, you can easily locate the paperwork needed after the sale.
Get paid, instantly
Before PrivateAuto, receiving funds was the most stressful part of the entire selling process, especially for any used car sale over $5,000. There just aren’t a lot of good ways to move large amounts of money quickly and conveniently. Those days are over! Verify and receive funds instantaneously with PrivateAuto Pay, our innovative banking integration. Guaranteed funds for transactions large and small.
When you sell your vehicle, fill out the necessary information on the back of the certificate of title and sign it in order to transfer ownership of the vehicle to the new owner.
Idaho Sales Tax Frequently Asked Questions
Which state has the cheapest car tax?
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.
If you really want to avoid car sales tax, you might consider moving to one of these states.
With the exception of the above states, all US states charge sales tax on private-party car purchases. Some states offer tax exemptions for certain types of motor vehicles. States such as Oklahoma, North Carolina, Colorado, and Alabama charge a lower sales tax rate on motor vehicles (less than 3.5%),.
How much tax do I pay on a private car sale in Idaho?
In the state of Idaho, a sales tax equal to 6% of the vehicle's purchase price is applied to all private vehicle transactions. The purchase price that is written on the title of the vehicle and the bill of sale must be identical and accurate in order to guarantee that the correct amount of tax is paid to the state.
What is the sales use tax rate in Idaho Falls?
The sales tax rate in Idaho Falls, Idaho, is 6.00%. This includes the state sales tax rate of 6.00%. There is no additional county or city sales tax in Idaho Falls. For example, if the vehicle purchase is $20,000, you will pay $1,200 in taxes.
How often do you pay car registration in Idaho?
Idaho requires residents to renew their registration once a year. You should receive a notice in the mail reminding you of the date your registration is due for renewal.
Is there property tax on cars in Idaho?
Idaho does not levy property taxes on cars. The state repealed its vehicle property tax in 2013. Idaho does have other taxes, such as the following:
- Cigarette tax
- Alcohol tax
- Fuels tax
- Income tax
- Sales tax
Can you gift a car in Idaho?
You can gift a car in Idaho. To gift a car in Idaho, you must complete a sales tax exemption certificate and go through the standard vehicle title transfer procedure.
Is there a lemon law in Idaho for used cars?
No, Idaho does not have a lemon law for used cars. Only new vehicles covered by a manufacturer's warranty are subject to the state's lemon law. Even if they are still under warranty, used cars are not subject to the lemon law.