Where to Find a Tax Free Car Purchase

January 27, 2012

If you're looking for a tax free car purchase, you will have to keep certain important considerations in mind. When shopping for a new vehicle, you will end up paying much more than the price you negotiate with the dealer. This is because the vehicle sales tax, registration and title fees increase the overall expenditure on the car. Sales tax differs in every state. On top of that, the taxable amount often varies in each county. However, there are certain states in the US that are exempt from sales tax.

Tax Free Auto Purchase

Orgeon, Alaska, Delaware, Montana and New Hampshire are five states that do not charge sales tax on car purchases. However, you must know that you cannot purchase a car in one of these states and register it in your home state, in order to avoid sales tax. If you buy a vehicle in Oregon or Montana and get it registered in your home state, you will be charged the applicable sales tax at the time of vehicle registration. Therefore, even if you wish to purchase a vehicle in another county, simply because the sales tax is lower than that charged in your county, you won't benefit if you register the vehicle in your county.

If you wish to purchase a car and pay absolutely no sales tax, you would have to purchase the vehicle in one of the 'no sales tax states' and register it in that very state. It is against the law to use an incorrect or invalid address in order to avoid sales tax and complete the registration process. If you currently reside in a no sales tax state, and wish to relocate to a state where sales tax is imposed, consider buying the vehicle no later than 90 days before your date of relocation. This will help you avoid the sales tax while still keeping in accordance with the law. Although this is the case with regards to car sales tax in the US, there are certain tax free car sales that are offered in the UK.

UK Tax Free Car

Tax free and tax paid cars are offered for sale to British army, navy and air force personnel, located in the UK or overseas. UK military personnel serving overseas can avail of a special military discount of nearly 30 percent on new vehicle purchases. Volvo is one such company that offers tax free car sales to diplomats, individuals belonging to a recognized international organization and expatriates who are temporarily residing in the UK. To obtain detailed information on Volvo tax free car sales and find out if you qualify for a tax free purchase, visit the volvocarstaxfree.com website.

Duty on Imports

Apart from sales tax, if you want to purchase and import a vehicle from another country into the US, you're liable to pay certain duties. Most vehicles manufactured in Canada and imported into the US are tax duty free. As a general guideline, passenger vehicles are dutiable at a rate of 2.5 percent of the purchase price of the vehicle. However, if you are a returning resident to the US, you will be able to use your maximum customs exemption amount towards the import duty.

It's important to be aware of the law that governs sales tax in your state. To find out how much you will have to pay for vehicle title and registration fees, visit your nearest DMV office.

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