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 if it’s a private sale or a dealer sale whether or not taxes are due and sometimes it depends if 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 and 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 if it’s new or used or dealer. Be aware that the transfer of a vehicle, whether or not it’s done and 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 in the car. But a transfer of a vehicle, even if a new title wasn’t issued, might trigger sales tax being due to 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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