How sales tax works on a used car (with examples from 7 big metros)
Used-car sales tax depends on which location's rate applies, whether your trade-in is credited, and whether local tax stops partway. Here's how each works, and what the same $25,000 car costs in tax in Houston, Los Angeles, Phoenix, Atlanta, Chicago, Denver and Salt Lake City.
By the LotGauge team
Three questions decide your used-car sales tax
Vehicle sales tax looks simple (a percentage of the price), but three details change the bill: which location's rate applies (the dealer's or the place you register the car), whether your trade-in reduces the taxable amount, and whether local taxes apply in full or only up to a limit. States answer these differently, and some treat dealer and private-party sales differently.
Dealer location vs. where you register
Some states charge tax based on where the dealer is located; others base it on where you will register the car. In Utah, for example, an in-state dealer sale is generally taxed at the dealer's local combined rate, while private-party purchases are taxed based on where the buyer registers the vehicle (Utah Publication 5). Colorado works the other way: state and local tax is generally based on where you live and register the car.
Texas uses a single statewide motor vehicle tax of 6.25%, so local city and county sales tax rates don't apply to the vehicle (Texas Comptroller). Georgia doesn't charge sales tax on cars at all; it charges a one-time title ad valorem tax (TAVT) instead.
How a trade-in can lower the tax
Most states tax only the difference between the purchase price and your trade-in value when you trade a car in to the dealer you're buying from. On a $25,000 car with a $5,000 trade-in, that means tax on $20,000 instead of $25,000.
That credit usually requires a trade-in to the selling dealer; a private seller doesn't take trades. California and Virginia give no trade-in credit at all. See how the trade-in credit works by state.
When local tax stops partway
Some places limit how much of a car's price the local tax applies to. Florida's county surtax applies only to the first $5,000. In Phoenix, the city's 2.8% tax applies to the first $14,338 of a single item, and the city rate drops to 2.0% above that. The state and county rates still apply to the whole price.
The same deal in seven big metros
Take a $25,000 used car from a dealer with a $5,000 trade-in. Here's the sales tax in each place:
Houston and Dallas: 6.25% of $20,000 = $1,250. Texas uses one statewide rate. Open the Houston example.
Los Angeles: 10.25% of the full $25,000 = $2,562.50. California gives no trade-in credit, so the trade saves nothing on tax. Open the Los Angeles example.
Phoenix: 8.3% of $20,000 plus 0.8% of the first $14,338 = about $1,775. That's 5.6% state and 0.7% Maricopa County tax on the whole amount, with the city's 2.8% applying only to the first $14,338 and 2.0% above it. Open the Phoenix example.
Atlanta: Georgia's 7% title ad valorem tax, with the dealer trade-in subtracted. TAVT is based on the state's assessed value of the car, not your price; if that's close to $25,000, it's about $1,400. Open the Atlanta example.
Chicago: Illinois credits the full trade-in. Chicago-area rates depend on the dealer's exact location and are around 10% in the city; at an illustrative 10%, tax is $2,000. Open the example and enter your dealer's rate.
Denver: Colorado credits a licensed dealer's trade-in, and the rate depends on where you live and register the car. At an illustrative 9%, tax is $1,800. Open the example and enter your rate.
Salt Lake City: 8.45% of $20,000 = $1,690, at the dealer's combined rate. Open the Salt Lake City example.
The same car's tax ranges from $1,250 in Texas to $2,562.50 in Los Angeles, a difference of more than $1,300. Rates change, so treat these as illustrations and confirm the exact amount on your purchase contract.
Fees that are taxed (and fees that aren't)
Whether dealer documentation fees are taxable depends on the state. Government title and registration fees are separate charges, not sales tax. Our out-the-door price guide shows how they all add up, and the calculator checks whether a dealer's doc fee is high for your state.
Estimate yours
The LotGauge car payment calculator can apply a verified state rule for supported ZIP codes, including trade-in treatment, local caps and city tiers like Phoenix's, or use a percentage you enter. It shows the date each automatic rate was confirmed so you can judge how current it is.
Sources
Texas Comptroller, Motor Vehicle Sales and Use Tax. CDTFA, California city and county sales and use tax rates and Tax Guide for Motor Vehicle Dealers. City of Phoenix, Combined Tax Rate Chart (January 2026). Georgia Department of Revenue, TAVT FAQ. Illinois Administrative Code, 86 Ill. Adm. Code 130.425. Colorado Department of Revenue, Sales & Use Tax Topics: Motor Vehicle Sales. Utah State Tax Commission, Publication 5. Florida DOR, GT-800030. Checked October 2026. Tax figures are examples for a typical dealer purchase, not tax advice.