How Much Is Sales Tax on a Car in Utah?

Sales tax on car purchases in Utah is a statewide requirement, but the exact amount can vary based on several factors unique to your transaction and location.

Utah Sales Tax Rate and Calculation

Utah imposes a state sales tax of 4.85% on vehicle purchases. The total sales tax rate also includes local sales taxes imposed by counties and municipalities, which can add up to an additional 2.1% to the state rate. This leads to a combined sales tax rate that varies depending on where the vehicle is purchased or registered.

The combined sales tax rate in Utah ranges from 6.1% to 9.05%, with an average around 6.96%. To determine the rate applicable to your transaction, consider the specific city and county where a dealership is located for a dealer sale, or where you intend to register the vehicle for a private party sale. Sales tax is calculated on the agreed-upon purchase price of the vehicle. This includes cash payments, loan payoffs, and the value of any vehicle trade-ins. If the stated purchase price appears low, the Utah Tax Commission may assess the tax based on the vehicle’s fair market value, determined through recognized valuation guides.

Specific Rules for Vehicle Sales

Several specific rules apply to vehicle sales that can impact the final sales tax amount. Trade-ins are a significant factor. When you trade in an existing vehicle as part of a new car purchase, the sales tax is calculated on the net purchase price, which is the selling price of the new vehicle minus the trade-in allowance. This reduction applies only if the trade-in is a vehicle-for-vehicle exchange and occurs within the same transaction.

The impact of manufacturer rebates and dealer discounts also requires attention. In Utah, both manufacturer rebates and dealer discounts reduce the taxable amount of the vehicle. This means the sales tax is computed on the price after these reductions have been applied, resulting in a lower overall tax liability. Sales tax is applicable to both new and used vehicles acquired from licensed dealerships.

For vehicles purchased through a private party sale, sales tax is still due on the transaction. Unlike some other states, vehicle sales between family members in Utah are not exempt from sales tax.

Paying Sales Tax and Other Vehicle Fees

If you buy a vehicle from a licensed dealership, the sales tax is collected by the dealer at the time of sale. The dealership is then responsible for remitting these funds to the state tax commission. For private party sales, the buyer pays the sales tax directly to the Utah Division of Motor Vehicles (DMV) when they register and title the vehicle in their name. The tax is based on the purchase price documented in the bill of sale. If a bill of sale is not provided or if the stated price is questionable, the DMV may determine the taxable amount based on the vehicle’s fair market value using industry standards.

Specific documents are required when paying sales tax and completing registration. These include the bill of sale, the vehicle’s certificate of title, an application for title (Form TC-656), and an odometer disclosure statement (Form TC-891). Beyond sales tax, other mandatory charges include vehicle registration fees, title transfer fees, and license plate fees. The title transfer fee in Utah is $6. Registration fees vary based on factors like vehicle type, weight, and the county of registration, while license plate fees are $12. Dealerships may also charge a documentation fee, which covers the cost of preparing and filing sales contracts, often averaging between $305 and $399.