Vehicle License Tax (VLT) is an annual 2.80% to 2.89% ad valorem tax levied on a diminishing percentage of your registered vehicle’s assessed value, depending on its model year.
New cars are taxed 2.80% on 60% of their MSRP while used cars are taxed 2.89% on 60% of the MSRP with an annual deduction of 16.25%.
The Arizona Department of Transportation (ADOT) collects your VLT when you pay your annual
. The Arizona MVD offers a handy calculator in case math isn’t your strong suit.
Annual VLT and registration fees in Arizona
The VLT is part of your annual driver registration fees as a resident and registered driver in the state of Arizona. Be prepared to pay the following potential fees when you renew your registration at your local MVD office:
Most Arizona residents who register a car must pay the annual VLT. However, there are numerous exemptions to paying the VLT based on who you are, where you work, and what you drive.
Here are some of the most common tax exemptions to paying Arizona’s VLT:
Part-time residents: These requirements apply to snowbirds and other part-time residents who only plan on residing in the state for a limited period of time. Figure out how long you’ll be residing in the state during a single calendar year to determine your registration requirements.
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Arizona doesn’t charge a personal property tax, as many other states do. The VLT is an "in lieu" tax for Arizona to still generate revenue off of vehicle purchases.
I’m a retiree who spends winters in Arizona. Do I need to pay the VLT?
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It depends on how much time you spend in the state. If you spend more than seven months per calendar year in Arizona, you’ll need to register your car there and pay the VLT.