AutoTaxCalculatorArizona sales tax on vehicles: 5.6% plus local
Arizona car sales tax = (price − trade-in) × (5.6% state + county and city rate at the dealer). On a $35,000 car with a $10,000 trade-in and a 2.5% local rate, that's $2,025.
Sales tax on vehicles in Arizona is charged by the dealer's location, not yours. The state rate is made of two parts. A.R.S. § 42-5010 sets the retail rate at 5%, and § 42-5010.01 adds a 0.6% increment for education from July 1, 2021 through June 30, 2041. Counties levy their own excise tax, and most cities add a privilege tax too, so the total you pay varies around the state.
Why the dealer's location matters
Under A.R.S. § 42-5040, a retail sale is sourced to the seller's business location when the seller receives the order at a location in Arizona. That means you pay the county and city rates where the dealership is, not where you live. Two dealers selling the same car at the same price can charge different tax totals if they're in different cities. If the deal is close, it's worth comparing.
An out-of-state seller taking an order from you at a location outside Arizona sources the sale to your location instead.
Trade-ins and the taxable price
A.R.S. § 42-5001 excludes the value of merchandise traded in on the purchase of new merchandise when the trade-in allowance is deducted from the sales price before the sale is completed. In practice, trade your old car in as part of the same deal and the tax applies only to the difference. Selling it privately afterward doesn't reduce the tax on the car you bought.
Cash discounts taken on the sale also reduce gross income, so they come off the taxable amount too.
Private sales
TPT is a tax on the business of selling at retail. When you buy from a private individual who isn't in the business of selling cars, there's no TPT. You still pay title and registration at MVD, including the vehicle license tax, which is Arizona's yearly value-based tax on vehicles. See our Arizona registration fee calculator for that part.
Nonresident buyers
Arizona exempts sales of motor vehicles to nonresidents for use outside the state when the dealer ships or delivers the vehicle out of state. There's a separate exemption for a nonresident whose home state doesn't give a corresponding use tax exemption and who has secured a special 90-day nonresident registration permit. If you live in another state, ask the dealer how they'll handle the tax before you sign.
Worked examples
$35,000 SUV with a $10,000 trade-in, local rate 2.5%
- Taxable amount: $35,000 − $10,000 = $25,000
- State TPT: $25,000 × 5.6% = $1,400.00
- Local: $25,000 × 2.5% = $625.00
- Total tax: $2,025.00
Same car, no trade-in, bought from a neighbor
- Private sale between individuals: no TPT
- You pay only MVD title and registration fees
Frequently asked questions
Is Arizona car tax the same in Phoenix and Tucson?
The 5.6% state part is the same everywhere. County and city rates differ, so the total depends on the dealer's city and county.
Do I pay Arizona tax on a car bought in another state?
Arizona use tax can apply to vehicles bought from out-of-state sellers for use in Arizona. MVD will ask about tax paid when you title the car.
How long will the 0.6% part of the rate last?
The 0.6% increment in § 42-5010.01 runs through June 30, 2041.
Sources
- A.R.S. § 42-5010: Rates; distribution base
- A.R.S. § 42-5010.01: Additional rate increment (0.6%)
- A.R.S. § 42-5001: Definitions (trade-ins)
- A.R.S. § 42-5040: Sourcing of retail sales
- A.R.S. § 42-5061: Retail classification and exemptions
This calculator gives an estimate. The dealer and the Arizona Department of Revenue determine the final tax. How we calculate