How to Calculate Auto Sales Tax for a Resident of Arizonaby Lauren Farrelly
Each state has its own sales tax rate, and the rate can vary based on the type of product being purchased. In Arizona, a sales tax is not collected on the vehicle purchase but rather a Vehicle License Tax is levied against the vehicle. the tax The tax rate will vary based upon whether it is a new or used vehicle.
The tax rate for a new vehicle is calculated at $2.80 per $100 of the assessed value of the vehicle, and $2.89 for each $100 of the assessed value on used vehicles.
Assess the value of the new vehicle. Multiply the base retail price by 60% (0.60) for a new car.
Determine how many years the vehicle has been previously registered in Arizona (if purchasing a used car). For each year, reduce the retail price by 16.25%.
Determine your Vehicle License Tax. For a $25,000 new vehicle, the equation would be: $25,000 x 0.60 (60% assessed value since it is a new vehicle) = $15,000, then $15,000/$100 = 150, then 150 x $2.80 = $420 vehicle license tax.
For a $15,000 used vehicle that has been registered in Arizona for two years, the equation would look like this: 60% - (16.25% x 2) = 27.50, then $15,000 x 0.2750 = $4,125, then $4125/$100 = 41.25, then 41.25 x $2.89 = $119.21 vehicle license tax.
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