All vehicles sold in Mississippi
are subject to the state tax rate of 5%. A large number of counties in the Magnolia State do not levy any local tax—these county and local governments have the ability to include a 1% tax on car sales, but many choose not to. Because of this, tax rates are exclusively between 5% and 6%, with an average of 5.065%. If you’re in the market for a new car, you probably already know that there are additional payments you’ll have to make on top of the retail price. One of these hidden figures is car sales tax, which will vary depending on where exactly you purchase your new vehicle.
Mississippi has fairly low rates for car sales tax, even in counties that levy an additional 1% local tax. Still, it’s important to have a reliable estimate of what you can expect to pay. That’s why we created this guide to car sales tax in Mississippi.
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The statewide sales tax in Mississippi is 5% on all new and used car purchases. Depending on where you live, you might have to pay an additional 1% county or local sales tax.
Fortunately, a large number of counties in Mississippi forgo the additional 1% tax. This means that you can get the lowest possible tax rate across most of the state. However, the counties of Rankin, Madison, and Hinds still charge the 1% local tax, for a combined rate of 6%.
How are car trade-ins taxed in Mississippi?
What about the taxes on trading in your car? Most dealerships give you the option of trading in your old vehicle and applying the credit towards your new one. You’ll save money by doing this because car sales tax doesn’t apply to trade-in value in Mississippi.
Case in point, let’s say you’re trading in a Nissan Altima
for $2,000 credit towards a new Kia Soul
worth $22,000 in Coldwater
. Tate County does not levy local tax, so you would only pay the 5% state tax rate on the $20,000 purchase. Remember that dealer rebates and incentives are not exempt from sales tax, meaning that the taxable price of your vehicle is the price before dealer incentives are factored in. For rebates, you still pay the sales tax as though you were paying full price for the vehicle.
How to calculate sales tax on a car in Mississippi
Mississippi’s relatively flat rate of taxation makes it easy to determine car sales tax, but you can always use a tax calculator to get a more precise figure. Remember to figure out if your county charges the additional 1% local tax when you’re crunching the numbers.
Key Takeaway Combine the statewide sales tax of 5% with your local or county sales tax (if applicable) to get the total car sales tax in your area.
Exemption from Mississippi car sales tax
Most car purchases in Mississippi are subject to sales tax, but certain circumstances allow you to apply for an exemption. Compared to other states, Mississippi does not offer much in the way of exemptions. Specific instances include:
Vehicles purchased by Mississippi citizens in the Armed Forces for out of state use
Vehicles purchased and used by nonprofits
Vehicles purchased while the buyer was a resident of another state
Vehicles purchased and used by religious institutions
For a comprehensive list of items qualifying for Mississippi tax exemptions, check out these online tax exmeption guides
. How to estimate Mississippi tax, title, and registration fees
Sales tax isn’t the only extra fee you’ll have to pay when buying a car in Mississippi. There are also fees for title and vehicle registration
and license plate
transfer to consider, as well as the documentation fee that many dealerships charge. Take a look at these additional costs:
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