What Is the Vehicle License Tax (VLT) in Arizona?

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Driving into Sedona, Arizona (Photo: @emma_ontheroad via Twenty20)
If you live in Arizona, you’ve probably heard of a Vehicle License Tax (VLT). The VLT is the costliest component of the fees you pay each year to register your vehicle in the state. This makes it important for you to understand what VLT is, what it’s used for, and how much you can expect to pay.
For more on VLT and what it is all about, read the info below.

What Is a Vehicle License Tax?

Vehicle License Tax, or simply VLT, is a part of the vehicle registration fees drivers have to pay in Arizona. Similar to the personal property tax charged by other states, VLT is based on the assessed value of the vehicle you register.
Who has to register a vehicle in Arizona, and thus pay VLT, comes down to how much of the year the driver lives in Arizona. Arizona state law requires anyone who lives in Arizona for seven or more months during any calendar year to get a driver’s license and register their vehicle in state.
And while you have to pay the VLT on your vehicle each year, regardless of age, you can get an exemption depending on the type of vehicle, who you work for, and who you are. You can find some of the more common VLT exemptions below.
  • Alternate fuel vehicles/Electric vehicles
  • Nongovernment emergency service personnel
  • Use vehicle in conjunction with work for a nonprofit organization, religious institution, or nonprofit school
  • Receive Social Security income disability payments from the federal government
  • Widow or widower
  • Survivor of a fallen first responder
  • Survivor of a fallen military member
  • Native American tribe member
  • Specialized military exemption
  • 100% disabled veteran exemption
  • Purchased your vehicle using a VA grant

How Often Do You Pay VLT and How Much Does it Cost?

If you live in Arizona and drive a vehicle registered in the state, you must pay your vehicle registration fee and any associated fees, including VLT, each year. All of the fees are broken down into the following:
  • $8 registration fee
  • $4 title fee
  • $1.50 fee (air quality research)
  • Vehicle license tax (see how to calculate this tax below)
The VLT is the only non-fixed value when you pay your vehicle registration fees and is the costliest part of these fees. To determine the amount you have to pay, you must first determine the assessed value of the vehicle. This assessed value is 60% of the initial retail value. For each year that you register the vehicle with the Arizona Motor Vehicle Department (MVD), the amount is reduced by 16.25%.
Depending on whether the vehicle is new or used determines how much VLT you have to pay each year. For a used vehicle, you pay $2.89 for every $100 of assessed value. For a new vehicle, you pay $2.80 for every $100 of the assessed value.

What Happens if You Move to Arizona and Register an Older Vehicle

If you move to Arizona, you might be wondering how much you have to pay for VLT when you register your vehicle. Fortunately, you do not have to pay for the past years you drove the vehicle in another state. You would still determine the assessed value as normal.
Next, you drop it by 16.25% per year before you moved to the state. You would only apply the assessed value for the age of the vehicle when you register the vehicle in Arizona and would use the multiplier for a used car to determine the VLT you have to pay when registering your vehicle.
While the VLT you pay on your vehicle can be expensive, it goes toward a good cause. The VLT collected goes to pay for city and county roads, as well as being used to pay for better roads through the state’s highway fund. In addition to roads, the VLT funds collected from the MVD location in your area goes toward your city and county’s general fund.