How to Calculate North Carolina Car Tax

If you've bought a new or used vehicle in North Carolina, you're liable to pay the mandatory North Carolina car tax, also known as the Highway Use Tax. Instead of charging the regular sales tax that's common in most other states, North Carolina charges a Highway Use Tax (HUT) that's used to maintain and improve roads within the state. A part of the funds collected through this tax are also set aside for the state's General Fund. To calculate the amount you owe towards HUT, follow the guidelines below.

Calculating North Carolina State Auto Sales Tax:

• If you've purchased a new or used vehicle from a car dealer or a leasing company, you will have to pay 3 percent of the purchase price of the vehicle (less trade-in credit).
• If you've purchased a vehicle from any seller (other than a dealer) you will have to pay 3 percent of the value of your vehicle. To find out the actual value of your vehicle, contact your nearest DMV office and refer to the value table.
• There are certain things that you must bear in mind if you're an out of state resident. For instance, if the vehicle was purchased less than 90 days before completing a North Carolina title application, tax credit may be allowed only if tax was paid to the other state and proof of payment is submitted. However, if the vehicle title and registration is completed after 90 days of owning the vehicle, the full highway use tax amount will have to be paid (less trade-in credit).

If you wish to find out more about the vehicle title and registration process, visit the NCDOT website. You can also obtain detailed information on North Carolina traffic laws from this site.