﻿ How to Calculate Auto Sales Tax for a Resident of Arizona

How to Calculate Auto Sales Tax for a Resident of Arizona

1.

The tax rate for a new vehicle is calculated at \$2.80 per \$100 of the assessed value of the vehicle, and \$2.89 for each \$100 of the assessed value on used vehicles.

2.

Assess the value of the new vehicle. Multiply the base retail price by 60\% (0.60) for a new car.

3.

Determine how many years the vehicle has been previously registered in Arizona (if purchasing a used car). For each year, reduce the retail price by 16.25\%.

4.

Determine your Vehicle License Tax. For a \$25,000 new vehicle, the equation would be: \$25,000 x 0.60 (60\% assessed value since it is a new vehicle) = \$15,000, then \$15,000/\$100 = 150, then 150 x \$2.80 = \$420 vehicle license tax.

For a \$15,000 used vehicle that has been registered in Arizona for two years, the equation would look like this: 60\% - (16.25\% x 2) = 27.50, then \$15,000 x 0.2750 = \$4,125, then \$4125/\$100 = 41.25, then 41.25 x \$2.89 = \$119.21 vehicle license tax.

Each state has its own sales tax rate, and the rate can vary based on the type of product being purchased. In Arizona, a sales tax is not collected on the vehicle purchase but rather a Vehicle License Tax is levied against the vehicle. the tax The tax rate will vary based upon whether it is a new or used vehicle.