Used Car Sales Tax in Texas: 6.25% Rate Guide
Texas used car sales tax, how to calculate it for private party and dealer purchases, trade-in credits, exemptions, and how and when to pay.
Texas Used Car Sales Tax Rates (State + Local)
Texas has a flat 6.25% motor vehicle sales and use tax. There are no additional local or county sales taxes on vehicles — all Texas vehicle purchases are taxed at the same 6.25% statewide rate, regardless of county.
Tax Base in Texas
Standard Presumptive Value (SPV) or purchase price — whichever is higher
Texas taxes vehicles based on the greater of: (1) the purchase price, or (2) the Standard Presumptive Value (SPV). SPV is the state's estimate of fair market value. If you pay below SPV, Texas taxes you on SPV anyway. Look up the SPV at comptroller.texas.gov before purchasing.
Trade-In Sales Tax Credit in Texas
Texas gives a sales tax credit for trade-ins at dealerships. The taxable amount is reduced by the trade-in allowance. Example: $20,000 purchase minus $5,000 trade-in = $15,000 taxable amount × 6.25% = $937.50.
Example calculation:
Texas purchase at $20,000 (SPV also $20,000): $20,000 × 6.25% = $1,250. With a $5,000 dealer trade-in: ($20,000 - $5,000) × 6.25% = $937.50.
Sales Tax on Private Party Used Car Sales in Texas
Private party used vehicle purchases are subject to Texas motor vehicle sales and use tax at 6.25%. Tax is paid to the county tax assessor-collector at the time of registration — not at the point of private sale.
Texas uses the SPV system for private party sales. Even if you agreed to a below-market price, Texas assesses tax on the SPV if SPV is higher. Exceptions: if you can prove the below-market price was not a gift (e.g., documented mechanical issues), you can request SPV adjustment.
Sales Tax on Dealer Used Car Purchases in Texas
Texas dealers collect 6.25% at point of sale on the net purchase price after trade-in credit. Dealers add sales tax to the contract, collect it, and remit to the state.
Texas dealers calculate tax on the sale price minus any trade-in. Unlike California, the trade-in credit is built into Texas dealership transactions by law.
Buying a Car Out of State and Registering in Texas
Vehicles purchased in another state and brought to Texas for registration are subject to Texas use tax at 6.25%. You can credit taxes paid to another state. Texas also applies SPV to out-of-state purchases.
If you paid sales tax in another state at 4%, Texas will collect 2.25% (the difference up to 6.25%). If you paid 6.25% or more in another state, Texas use tax is waived.
Texas Used Car Sales Tax Exemptions
- ✓Transfers between spouses
- ✓Transfers from parent to child or child to parent
- ✓Inheritance or gift between immediate family
- ✓Sale to a non-profit organization
- ✓Vehicles leaving Texas permanently
Texas family transfers require Form 14-317 (Affidavit of Motor Vehicle Gift Transfer) or equivalent. The $10 gift tax applies to family gifts that qualify for exemption from the regular 6.25% rate.
How to Pay Used Car Sales Tax in Texas
For private party sales: pay 6.25% motor vehicle tax to the county tax assessor-collector when registering. For dealer sales: the dealer collects and remits. Bring the bill of sale and title when registering.
Texas gives you 30 days to register a purchased vehicle. After 30 days, a penalty applies. Register promptly to avoid additional fees.
Texas Sales Tax Note
Texas's Standard Presumptive Value (SPV) system prevents tax avoidance through artificially low private sale prices. Always look up the SPV for any used car you're buying in Texas before negotiating — it determines your minimum tax basis.
Used Car Sales Tax FAQ — Texas
What is the sales tax rate on a used car in Texas?
The base state sales tax rate in Texas is 6.25%. Texas has a flat 6.25% motor vehicle sales and use tax. There are no additional local or county sales taxes on vehicles — all Texas vehicle purchases are taxed at the same 6.25% statewide rate, regardless of county.
Do I get a trade-in credit on sales tax when buying a used car in Texas?
Yes. Texas gives a sales tax credit for trade-ins at dealerships. The taxable amount is reduced by the trade-in allowance. Example: $20,000 purchase minus $5,000 trade-in = $15,000 taxable amount × 6.25% = $937.50.
How is sales tax calculated on a private party used car purchase in Texas?
Private party used vehicle purchases are subject to Texas motor vehicle sales and use tax at 6.25%. Tax is paid to the county tax assessor-collector at the time of registration — not at the point of private sale. Texas uses the SPV system for private party sales. Even if you agreed to a below-market price, Texas assesses tax on the SPV if SPV is higher. Exceptions: if you can prove the below-market price was not a gift (e.g., documented mechanical issues), you can request SPV adjustment.
How do I pay sales tax when buying a used car privately in Texas?
For private party sales: pay 6.25% motor vehicle tax to the county tax assessor-collector when registering. For dealer sales: the dealer collects and remits. Bring the bill of sale and title when registering. Texas gives you 30 days to register a purchased vehicle. After 30 days, a penalty applies. Register promptly to avoid additional fees.
Are there any used car sales tax exemptions in Texas?
Transfers between spouses; Transfers from parent to child or child to parent; Inheritance or gift between immediate family; Sale to a non-profit organization; Vehicles leaving Texas permanently. Texas family transfers require Form 14-317 (Affidavit of Motor Vehicle Gift Transfer) or equivalent. The $10 gift tax applies to family gifts that qualify for exemption from the regular 6.25% rate.
If I buy a car out of state and register it in Texas, do I pay Texas sales tax?
Vehicles purchased in another state and brought to Texas for registration are subject to Texas use tax at 6.25%. You can credit taxes paid to another state. Texas also applies SPV to out-of-state purchases. If you paid sales tax in another state at 4%, Texas will collect 2.25% (the difference up to 6.25%). If you paid 6.25% or more in another state, Texas use tax is waived.