Overview of Car Sales Tax

The state of New Hampshire sells modern and used cars the cheapest among America’s states due to no sales tax for motor vehicle purchases. This also applies to Montana, Oregon, and Alaska.

Fees and Taxes in Montana

There are two fees potential out-of-state registers should know in Montana: The $825 luxury vehicle fee for cars over $150,000 in value and the $800 motorhome fee for RVs over $300,000 in value.

Considerations When Buying a Car in Montana

Montana has no statewide sales tax for cars. Some cities and tourist destinations charge local sales taxes on most purchases. Many people register cars in Montana to avoid sales tax, especially on luxury vehicles. This involves hiring a Montana law firm to set up an LLC to register the vehicles. To transfer your license to Montana, you must pay fees, provide documentation proving identity and residency, take a driving test, and more.

Comparison with Other States

Many people register cars in Montana to avoid sales tax, especially on luxury vehicles. This involves hiring a Montana law firm to set up an LLC to register the vehicles.

Overview of States with No Car Sales Tax

Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax. You must register cars in these states to avoid sales tax.

Comparison of Sales Tax Rates

Thirty-eight states charge sales tax. Rates range from 2.9% in Colorado to 7.25% in California. Five states have no car sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Kansas has the highest car sales tax at 7.5%.

Consideration for Buying Used Cars

Most states charge sales tax on used cars bought from dealers but not private sellers. Luxury and motorhome fees apply in Montana despite no sales tax.

Sales Tax Regulation

You can avoid paying sales tax with a valid resale certificate. If you don’t file and pay owed sales tax, there are penalties and interest. Local taxes may increase total sales tax paid. Tax rates vary widely among states and even counties.