Tennessee car sales tax: what you’ll pay in 2025

Tennessee charges 7% state sales tax on the full purchase price of a motor vehicle. In addition, you’ll pay a local sales tax (up to 2.75%) only on the first $1,600 of the price (maximum $44) and a separate state “single article” tax of 2.75% on the portion of the price between $1,600 and $3,200 (maximum $44). That means, beyond the 7% on the full price, the most you’ll pay in extra sales taxes is about $88, plus registration and title fees.

How Tennessee taxes motor vehicle purchases

Tennessee’s vehicle tax structure combines a statewide rate with capped local and state surcharges that apply only to the first slice of a vehicle’s price. Here are the pieces that typically apply when you buy a car in Tennessee, whether at a dealership or when you title a private-party purchase at the county clerk’s office.

• State sales tax: 7% on the entire taxable sales price of the vehicle.
• Local option sales tax: your county/city rate (varies, up to 2.75%), but applied only to the first $1,600 of the vehicle’s price. The maximum local tax on a car is therefore $44.
• State single-article tax: 2.75% applied only to the portion of the price between $1,600 and $3,200, for a maximum of $44.
• Result: You pay 7% of the full price, plus up to $88 combined from the capped local and single-article taxes—regardless of how expensive the car is.

Together, these components produce a predictable ceiling: after the 7% state tax, the extra sales taxes top out at about $88. Your exact local portion depends on the county/city rate where the vehicle is titled.

What counts toward the taxable price

The taxable price is not always the sticker price. Tennessee rules determine what gets included or excluded when calculating your sales tax on a car purchase.

• Trade-in credit: If you trade a vehicle to the dealer, the trade-in value reduces the taxable price.
• Dealer discounts: Reduce the taxable price.
• Manufacturer rebates: Generally do not reduce the taxable price (tax is calculated before the rebate).
• Dealer fees and add-ons: Documentation/processing fees, installed accessories, and delivery fees included in the sale are typically taxable.
• Private-party trades: If you sell your old car yourself, there’s no trade-in credit; tax is based on the full purchase price of the new vehicle.

These rules can meaningfully change what you owe. For example, trading in a car at the dealer typically lowers both the 7% state portion and how quickly you hit the caps for the single-article calculation.

Private-party purchases and titling

If you buy from a private seller, you’ll pay Tennessee use tax at your county clerk’s office when you title and register the vehicle. The same rates and caps apply: 7% state on the full price, local option tax only on the first $1,600, and the 2.75% single-article tax on the $1,600–$3,200 slice. Be prepared to document the purchase price (bill of sale) and pay registration/title fees at the same time.

How to calculate your Tennessee car sales tax

Use these steps to estimate sales tax on a Tennessee vehicle purchase. This method works for both dealer and private-party transactions when titling in Tennessee.

1. Find your taxable price: Start with the agreed sales price, subtract dealer discounts and any trade-in value to the dealer. Do not subtract manufacturer rebates.
2. Calculate state tax: 7% of the taxable price.
3. Calculate local tax: Your local rate (up to 2.75%) applied to the lesser of the taxable price or $1,600.
4. Calculate the single-article tax: 2.75% applied to the portion of the taxable price between $1,600 and $3,200 (maximum base of $1,600).
5. Add them up: State tax + local tax + single-article tax = total sales tax due (before registration/title fees).

This framework produces a reliable estimate. Remember that while the 7% state tax scales with price, the added local and single-article pieces are capped, so their combined maximum is about $88.

Examples

These sample calculations illustrate typical Tennessee outcomes. Local rates vary by county/city; we show a couple of common scenarios.

1. $30,000 vehicle, no trade-in, local rate 2.25%:
   – State tax: 7% of $30,000 = $2,100
   – Local tax: 2.25% of first $1,600 = $36.00
   – Single-article: 2.75% of $1,600 = $44.00
   – Total sales tax: $2,180.00
2. $10,000 vehicle, no trade-in, local rate 2.75%:
   – State tax: 7% of $10,000 = $700
   – Local tax: 2.75% of $1,600 = $44.00
   – Single-article: 2.75% of $1,600 = $44.00
   – Total sales tax: $788.00
3. $2,000 vehicle, no trade-in, local rate 2.75%:
   – State tax: 7% of $2,000 = $140
   – Local tax: 2.75% of $1,600 = $44.00
   – Single-article: 2.75% of $400 = $11.00
   – Total sales tax: $195.00
4. $30,000 vehicle with $8,000 dealer trade-in (taxable price $22,000), local rate 2.25%:
   – State tax: 7% of $22,000 = $1,540
   – Local tax: 2.25% of $1,600 = $36.00
   – Single-article: 2.75% of $1,600 = $44.00
   – Total sales tax: $1,620.00

Because the local and single-article components are capped, higher vehicle prices mainly affect the 7% state portion, while the add-ons level off quickly.

Other costs you’ll see (not sales tax)

When budgeting, include non-tax fees that are due at purchase or titling. These are separate from sales tax and can vary by vehicle and county.

• Title fee: Typically around $11 (statewide standard).
• Registration fee: Base state registration for a standard passenger vehicle is commonly around $26.50, plus any county wheel tax (varies by county and can range from $0 to over $100).
• Temporary tag and dealer documentation fees: Dealer doc fees are taxable; temp tags are usually modest fixed fees.
• EV/hybrid highway user fees: As of 2025, Tennessee imposes additional annual fees at registration (for example, $200 for battery-electric vehicles; some hybrids/plug-in hybrids carry a lower additional fee). Check current amounts with your county clerk.

These fees can add up, especially county wheel taxes and EV-related charges, but they are separate from the sales tax calculation.

Where to confirm your exact rate

Local option tax rates vary by county/city, though they only apply to the first $1,600 of the vehicle price. For the most accurate total, contact your county clerk or consult the Tennessee Department of Revenue’s sales and use tax resources and local rate schedules before you buy or title the vehicle.

Summary

In Tennessee, car buyers pay 7% state sales tax on the full price, plus a local tax (up to 2.75%) only on the first $1,600 of the price and a 2.75% state single-article tax on the $1,600–$3,200 slice. The combined local and single-article add-ons cap at roughly $88, so after that, only the 7% state portion rises with the vehicle price. Registration, title, and any county wheel or EV fees are extra and separate from sales tax.

How do I calculate sales tax on a car in Tennessee?

Sales Tax

1. State Sales Tax is 7% of purchase price less total value of trade in.
2. Local Sales Tax is 2.25% of the first $1,600. This amount is never to exceed $36.00. For. purchases in excess of $1,600, an additional state tax of 2.75% is added up to a. maximum of $44.
3. Local collection fee is $1.

How much does it cost to title and register a car in Tennessee?

The total cost to title and register a car in Tennessee varies by county but generally includes sales tax, a wheel tax, and a standard title and registration fee, with initial fees for a new plate often ranging from about $80 to over $120 for private passenger vehicles, plus the 7% state sales tax and any applicable local taxes or fees. For example, in Nashville, a private passenger vehicle may cost around $86 to $89 for the title and registration, while in Knox County, the total for a new title and registration is typically around $77 plus sales tax, according to Nashville.gov and Knox County Tennessee Government. 
Breakdown of Costs

• Sales Tax: This is a significant cost, calculated as 7% of the vehicle’s purchase price minus any trade-in value. 
• Title Fee: A fee for issuing the official title certificate. 
• License Plate Fee: A fee for the standard vehicle license plate. 
• Wheel Tax (Metro Vehicle Regulatory Fee): A local fee that varies by county. 
• Other Fees: Mailing fees, lien noting fees (if a loan is involved), and specialty tag fees can add to the total cost. 

Example Costs by County

• Nashville: Opens in new tabFor a private passenger vehicle, you can expect a total of $86 to $89 for the Metro Vehicle Regulatory Fee, registration, and postage, plus the sales tax. 
• Knox County: Opens in new tabThe total for a new title and registration is around $77, which covers standard plate and title fees, plus sales tax. 

Important Considerations 

• County-Specific Fees: Fees and taxes vary by county, so it’s best to check with your specific county clerk’s office for an accurate quote.
• Dealer vs. Private Party: If you buy from a dealership, sales tax is paid to the dealer; if you buy from a private seller, you pay sales tax at the County Clerk’s office.
• Trade-Ins: The value of any trade-in vehicle is deducted from the purchase price before calculating the sales tax.

What is the 9.75% tax in Tennessee on a car?

7% State Tax on the sale price minus the trade-in. 1.5% to 2.75% Local Tax on the first $1600 of the purchase. 2.75% Single Article Tax from the second $1600 up to $3200. 9.75% Contract Tax on warranty and maintenance.

What state has the best sales tax on cars?

The “best” state to buy a car from a sales tax perspective is one with no statewide sales tax, such as Oregon, New Hampshire, Montana, Alaska, or Delaware. However, you will ultimately pay the sales tax rate of the state where you register the vehicle, not where you buy it, meaning you’ll still need to pay your home state’s tax. 
States with no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. 
Important Considerations:

• Your Home State’s Tax Rate Matters Most: Opens in new tabEven if you buy the car in a no-sales-tax state, you will pay your home state’s sales tax when you register the vehicle there. 
• Fees and Other Costs: Opens in new tabSome states have no sales tax but may have higher registration or title fees, so compare total costs. 
• Local Taxes: Opens in new tabWhile no statewide sales tax applies, some cities or counties within these states might have their own local taxes. 
• Usage Tax: Opens in new tabSome states might charge a “Usage Tax,” which functions similarly to a sales tax but is applied based on the vehicle’s use rather than its purchase. 

How to Save Money on Sales Tax:

• Buy in a No-Sales-Tax State (and Register There): Opens in new tabThe only way to benefit from a no-sales-tax state is to become a resident of that state and register the vehicle there. 
• Consider Your Home State’s Tax Rate: Opens in new tabIf you live in a high-tax state, it may be more beneficial to buy locally rather than paying travel costs and still owing your home state’s sales tax. 
• Active Military and Specific Circumstances: Opens in new tabSome states, like Ohio, have specific provisions allowing active military members to avoid sales tax on vehicles purchased out of state and not immediately brought back to the state of purchase.