When purchasing a new or used car/truck, sales tax has to be paid. The process for this varies by state, but here in Wyoming, the sales tax rate is 5%. When trading a vehicle in, you only the pay the sales tax for the difference between the trade in value and the price of the new vehicle. For example, if you were to trade in your vehicle and get offered $10,000 offered for it and the new vehicle is $30,000, you pay sales tax on $20,000. In this case, the sales tax would be 5% of $20,000 which is $1000. In Wyoming, you would also need to calculate plates and registration fees.
What if you purchase a car out of state? Do you pay the sales tax for the state you purchase the car from?
Sales tax is paid according to the state in which the vehicle will be registered in- not the state is it purchased from.
Purchasing a vehicle out of state may seem like a good option at the time. However, consider factors such as the extra travel, risks involved with used vehicles as laws vary by state. Other factors that may hinder the option are the hassles and the extra paperwork such as VIN inspections. Some states may also require smog or emissions testing. Wyoming does not require smog or emissions testing.
For example, if you purchased a vehicle from Montana (which has no sales tax), but you live in Natrona County, Wyoming. You pay Natrona County, Wyoming sales tax at 5%. Purchase a used truck in Wyoming, you will still pay Wyoming sales tax.
With regards to financing a vehicle, depending on the state in which you purchase the vehicle, sales tax can be added in. This will, of course, depend on individual purchasing circumstances.
Contact your local county clerks office vehicle department, or nearest dealership to clarify in your area. Buying a vehicle locally helps support your local economy.
Lauren has been working in the automotive industry both in the U.K and in the U.S. for over 10 years. She has driven hundreds of vehicles, not only new cars but beaters without heaters, fast cars on fire, slow cars in snow, off-road trucks in the mucks, and old pickups with pups. She’s driven heaps of Jeeps, miles in muscle and once took her gran in a car from Japan.