Do I have to Pay Taxes on My Car to get a Title?

Car Taxes and Title Transfers Very frequently, the question comes up about car taxes and what taxes have to be paid on a car to get a title if the vehicle is being transferred to another person. That’s typically a trigger for taxes due when it is appropriate in that state, and it sometimes depends on whether it’s a private sale or a dealer sale whether or not taxes are due. Sometimes it also depends on whether it’s a new or used vehicle.

Annual Property and Ad Valorem Taxes In some states, they also have a property tax or an ad valorem tax which is due every year for ownership of that vehicle. Be aware that in many cases, the sales tax that you’re aware of in a property transfer is actually a sales and use tax, meaning that not just the sale of the vehicle triggers it but any use of the vehicle.

Statutory Determinations One of the things that will make a determination of this is the statutes for that state and depending on whether it’s new or used or from a dealer. Be aware that the transfer of a vehicle, whether or not it’s done by changing title, is a triggering event.

Jumping or Skipping Titles So if you jump title or skip titles, there may be taxes due for each one of those transfers. And who’s liable for it? It might be the new owner, it might be prior owners; that’s between the different people involved in the car transaction. But a transfer of a vehicle, even if a new title wasn’t issued, might trigger sales tax being due by somebody. So if you’re jumping titles or skipping titles, understand that there may be a tax that comes back to haunt you for an unpaid tax down the road.

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