How to Calculate Sales Tax for a New Car

For some of the goods and services, a sales tax will be charged at the time of purchase. In general, the sales tax will be collected by the seller from the buyer. After the buyer has paid the money the seller will send or remit the collected tax to the government. There are different ways for calculating the sales tax. The calculation of the sales tax varies according to each state.

Coming to the sales tax for the cars from state to state and also from county to county, the sales tax rates will vary. Depending on the states car's taxable price, the calculations for the sales tax may vary. Inturn, the monthly payment differs with change in the sales tax.

Let us see how to calculate the sales tax for a car.

• Evaluate the price of the car for which you want to calculate the sales tax. Factors like location or the state where you live, cost of the car, cost of the car after reducing the deductions, any trade-ins are done, cash incentives received on account purchase will all influence the calculation.
• Consider, all the expenses which are involved in purchasing the cars. These expenses also include the transfer fees along with the price of the car.
• Now sum all the expenses for which the taxes are not considered. Expenses like warranty costs and processing fees are deducted from the previously tax amount.
• Now, add all the expenses for which the taxes are to be paid. Like title transfer, getting a new licensed plate, insurance etc.
• For purchasing a new car, find out the state's tax purchase. Also check whether your state comes under tax free state.
• After all the above procedure is done, the sales tax rate should be multiplied with the price and which results the new car sales tax.

This is how the sales tax of a car is calculated.