The DMV Almanac

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Top 10

The 10 States with the Highest Sales Tax on Cars

These ten states impose the highest combined (state + typical local) sales tax on motor vehicle purchases. On a typical $35,000 new vehicle, the difference between top and bottom of this list is over $3,000 in upfront tax.

  1. 1

    Louisiana

    Combined sales tax rate: 10.00%

    $3,500 sales tax on a $35K vehicle

  2. 2

    Arkansas

    Combined sales tax rate: 9.50%

    $3,325 sales tax on a $35K vehicle

  3. 3

    Tennessee

    Combined sales tax rate: 9.50%

    $2,490 sales tax on a $35K vehicle

  4. 4

    Kansas

    Combined sales tax rate: 9.00%

    $3,150 sales tax on a $35K vehicle

  5. 5

    Washington

    Combined sales tax rate: 9.00%

    $3,150 sales tax on a $35K vehicle

  6. 6

    California

    Combined sales tax rate: 8.82%

    $3,087 sales tax on a $35K vehicle

  7. 7

    Arizona

    Combined sales tax rate: 8.60%

    $3,010 sales tax on a $35K vehicle

  8. 8

    Illinois

    Combined sales tax rate: 8.50%

    $2,975 sales tax on a $35K vehicle

  9. 9

    New York

    Combined sales tax rate: 8.50%

    $2,975 sales tax on a $35K vehicle

  10. 10

    Oklahoma

    Combined sales tax rate: 8.50%

    $2,975 sales tax on a $35K vehicle

What this means

These states have either high state rates (Tennessee's 7%, Louisiana's 5%) compounded by significant local additions, or unusually high combined rates (California's 8.82% statewide average, Illinois's 8.5%). The good news: trade-in credit reduces the taxable amount in most of these states. Tennessee even has a localized cap on the local portion (it only applies to the first $1,600 of the vehicle price).

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Frequently asked questions

Why does the same vehicle cost so much more tax in some states?

Sales tax on vehicles varies enormously across the US — from 0% in Alaska, Delaware, Montana, New Hampshire, and Oregon to over 9% in some local jurisdictions of high-tax states. On a $35,000 purchase the gap can mean $3,000+ in upfront cost.

Does trade-in credit reduce the taxable amount?

In most states, yes — trade-in credit reduces the price the tax applies to. But some notable exceptions: California taxes the full purchase price (no trade-in credit), and a few other states partial-credit. Always check the trade-in credit treatment on the relevant state page.

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