Car Sales Tax in Maryland
The average sales tax rate on car purchases in Maryland is 6%. Learn more about car sales tax here.
Written by Rob Shapiro
Reviewed by Jessica Barrett
If you buy a car in
Maryland
, you will need to pay a 6% sales tax on the purchase. The good news for Maryland residents is that sales tax is not collected at the city or county level. Just about every car purchase is subject to additional fees. One of these fees is sales tax, but the actual amount is determined by the state you live in and dependent upon whether your state collects taxes at various local levels.
While not as high as the sales tax in other states, like Kansas or Nevada, Maryland sales tax is still on the high side. And despite there being no tax on any local level, there is still a lot to know about car sales tax in Maryland.
Luckily, we created this guide to help you understand car sales tax in Maryland. Let’s take a closer look at how this might affect your purchase of a new car.
How much is the car sales tax rate in Maryland?
The state sales tax in Maryland is 6%. This means that whether you’re buying used or new, you will have to pay an additional 6% on your car purchase. In Maryland, you do not have to pay any sales tax at any other level, though.
Think of it this way: while the state sales tax is on the high side, it is balanced by the lack of other taxes, including county or city sales tax, that could be added to car purchases. This makes it hard to complain about the sales tax imposed by the state of Maryland.
How are car trade-ins taxed in Maryland?
When you buy a car, many dealerships offer a
trade-in option
where you can hand over your current car and apply its value, in the form of credit, to your new car. In Maryland, the state sales tax applies to the full price on the vehicle, before trade-ins and other incentives.To give you a better idea of how this works, let’s say you’re buying a
Buick Encore
for $27,000 in Maryland. You’re trading in your old Chevrolet Cobalt
for a $2,500 credit. You will still have to pay 6% sales tax on $27,000—even if your dealer is throwing in another incentive or two. Remember, no rebates or incentives offered by the dealer will be exempt from sales tax. All sales tax is applied prior to any other agreed-upon terms. You will pay tax on the full price of the vehicle in Maryland.
Key Takeaway If you’re trading in your current car for a credit on your new car, the state sales tax applies to the full price on the vehicle, before trade-ins and dealer rebates and incentives.
How to calculate sales tax on a car in Maryland
All you have to do is add 6% to your car purchase in Maryland. To make it easy, take the sticker price and multiply it by 1.06.
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Unfortunately, there are no exemptions for the Maryland car sales tax. This means that every resident will have to pay it and every vehicle will be subjected to it.
How to estimate Maryland tax, title, and registration fees
There are several additional costs to be mindful of when purchasing a car in Maryland. Make sure to factor in the title and registration fees, the fee needed to transfer your license plates, and the documentation fee that most dealerships are likely to add to your bill.
Review these additional costs associated with car purchases in Maryland:
Cost | Average cost |
|---|---|
Sales tax | 6% |
Registration fee | $60 |
Title fee | $75 |
Plate transfer | $25 |
Documentation fee | $340 |
Make sure you take these costs into account when determining how much money you have to buy a new car.
How to find affordable car insurance in Maryland
Once you’ve purchased your vehicle and paid the sales tax, there is still one big job left to do: find affordable car insurance! Don’t just sign up for the first policy you find. You can find the best rate without skimping on coverage by downloading the
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FAQ
How much is sales tax on a used car in Maryland?
In Maryland, the sales tax is 6% for used cars. Maryland’s sales tax is the same whether you’re purchasing a new or used vehicle and regardless of where you live in the state.
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