While your home state has a 0% statewide tax, Powder River, Richland, and Sheridan counties have the highest county sales taxes in the state. Despite being in a state free from a blanket sales tax, residents in these counties pay a rate of 5%.

How are car trade-ins taxed in Montana?

Trade-in value is not taxed in Montana—but dealer rebates and incentives do not lower the taxable value.

Although Powder River, Richland, and Sheridan counties apply sales tax to vehicle purchases, that amount does not apply to trade-in value. That means beyond avoiding a statewide tax rate, the total cost of your car purchase will be lower.

Here’s how it works: Let’s say you're buying a new

Jeep Wrangler Sport

for an asking price of $32,000. To do so, you’re going to

trade in your current vehicle

valued at $16,000. If your county tax rate is 5%, you’ll only be taxed $800 (instead of $1,600 without the trade-in).

While trade-ins can save a chunk of taxable change, the same does not apply to dealer rebates or incentives. Even if your dealer offers you a $1,000 gift card for that new Jeep, you’ll still be taxed for the full price of the vehicle.

How to calculate sales tax on a new car in Montana

With a 0% tax rate across most Montana zip codes, it’s easy to calculate the sales vehicle tax where you live.

Find the county or local website affiliated with your dealership’s location. You’ll be able to learn about the tax laws, find the local tax rate (if there is one), and calculate it using the vehicle’s purchase price.

Key Takeaway: Montana has no statewide sales tax, meaning you’ll just have to examine your county government website to calculate any tax rates.

How to estimate Montana tax, title, and registration fees

While Montana has no official statewide sales tax, you’ll still need to consider (and pay) and few additional fees including:

Titling fee

Vehicle registration

fee

Plate transfer fee

Dealership documentation fee

Here’s a breakdown of what most Montana fees will cost:

Cost	Average cost
Sales tax	7.915%
Title fee	$10.30
Plate transfer	$10
Documentation fee	$275 maximum

Registration: In Montana, the rate depends on the age of the vehicle.

New vehicles four years or younger: $217 annual fee

Used vehicles between five and 10 years old: $87 annual fee

Used vehicles older than 11 years: Either $28 annually or a one-time $87.50 registration fee

Out-of-state car owners have found a loophole for registering a car with Montana license plates by getting a Montana LLC. Your state of residence could be Delaware, Alaska, or California, but your fancy sports car could be registered with Montana plates and a Montana registration.

However, the Montana DMV has gotten wise to this tactic. That’s why some exotic cars and luxury cars are subject to a one-time Montana Luxury Vehicle Fee, which applies if the vehicle is valued over $150,000. There’s also an $800 motorhome fee for any RVs valued over $300,000.

Explore this

motor vehicle fee brochure

to learn about exemptions from the registration or titling process.

Remember to factor in the cost of car insurance! All Montana drivers must carry coverage that meets or exceeds the

state minimum requirements

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Jerry
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