I'm in the market for a new vehicle, and I'm having zero luck trying to determine how to calculate TOTAL tax owed on the final purchase price. Could someone please explain if "Use tax" and sales tax is combined or if they are separate. If separate, how do you calculate them? I've used all the Tax Calculators online, but I keep getting different rates, figures, etc. I live in Pinal county. Thank you!
Use tax is charged when sales tax is not applied. So if you purchase a car in one location, but register in another, you can owe use tax, particularly if taxes are higher where you are register the car. Use tax will be determined when you go to register the car so not usually an issue at the dealership.
One thing to note is in Arizona, sales tax on a vehicle is on the net charge, so if you trade in a vehicle, the value of the trade-in will reduce your tax owed.
Yes. 20 years ago I bought a car in Arizona. A few months later I moved to California. California charged me a couple thousand in taxes due before I could register my car in CA. We were not ready for that expense right after moving. They had something like a year after purchase to demand tax. Sucked.
Thank you. I'm an ex-East-Coaster and we never had anything like a Use Tax. Just standard sales tax. So you're saying that if I live in Arizona, then I don't have to pay a Use Tax? Just the sales tax? I live in AZ, and will be buying and driving the vehicle in AZ.
I think if you live in a city, but you buy in an unincorporated area, you might owe use tax on the city sales tax portion. Either way it should be figured out in registration but ask the dealership when you buy.
So for every 10,000 you get on your trade-in, your sales tax drops by $920.
Whereas if you buy outright, and sell your car to carmax or caravana, you don't get that.
Which sucks when you buy out of state.
You pay the Use Tax if you didnt pay sales tax at time of purchase, i.e you bought it out of state
You will have to figure the sales tax depending on which city in Arizona you buy it in if you want an exact number. They won’t differ much though.
If you are an Arizona resident buying a car from a dealer located in Arizona, you can forget about use tax, it's not applicable for that type of sale.
For the sales tax, there is a state rate of 5.6% plus additional amounts that depend on the county and municipality where the dealer is located. The total is generally around 8-9% in Maricopa county. I believe it's 8.7% in Casa Grande, Pinal County, for example.
There is also Vehicle License Tax which is based on the base MSRP of the car and goes down every year as the car depreciates. You usually pay the first year of that up front when you buy a new car from a dealer. For a $40,000 new car, that should be around $675 or so for the first year. You can look up the calculation on the ADOT site.
Thank you all, for the answers. I appreciate it!
Negotiate the price total out the door. That way you know what you’re paying.
This is why I want to know how to calculate tax. I'll be bringing a written proposal to the dealership, with all taxes and fees included. All they have to do is agree to my deal, or I walk.