How to Calculate Sales Tax On a Car in Florida

Florida Sales Tax

The current Florida sales tax rate on vehicles is 6%. This rate applies to the purchase of new or used cars, trucks, motorcycles, and other motor vehicles.

However, the actual amount you pay in sales tax can vary depending on several factors.

How to Calculate Florida Car Sales Tax

To calculate the sales tax on a car purchase in Florida, follow these steps:

1. Determine the vehicle’s purchase price or fair market value, whichever is higher.
2. Subtract any applicable trade-in allowance or dealer incentives from the purchase price.
3. Multiply the remaining amount by 0.06 (6%) to get the state sales tax.
4. Add any applicable county discretionary sales surtax, which can range from 0% to 1.5% on the first $5,000 of the taxable amount.

Florida Car Sales Tax Example

For example, if you buy a car for $20,000 with a $3,000 trade-in allowance in a county with a 1% surtax, the calculation would be:

• Purchase price: $20,000
• Trade-in allowance: $3,000
• Taxable amount: $20,000 – $3,000 = $17,000
• State sales tax: $17,000 x 0.06 = $1,020
• County surtax: $5,000 x 0.01 = $50 (capped at $5,000)
• Total sales tax: $1,020 + $50 = $1,070

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To find your county surtax for the current year, visit: https://floridarevenue.com/Pages/forms_index.aspx#discretionary

Click the drop-down for “Discretionary Sales Surtax and Tourist Development Tax Rates” and then open the PDF for DR-15DSS

Rates are updated annually.

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Scenarios for Reduced or Exempt Sales Tax

In certain situations, you may be eligible for a reduced or exempt sales tax on your car purchase in Florida:

1. Out-of-state purchases: If you buy a car in another state and pay that state’s sales tax, you may be eligible for a credit against Florida’s sales tax when registering the vehicle in Florida. The credit is limited to the lesser of the two states’ tax rates.
2. Military exemption: Active-duty military members stationed in Florida but residents of another state may be exempt from Florida’s sales tax if they meet specific requirements, such as not bringing the vehicle into Florida for at least six months.
3. Trade-in allowance: The trade-in value of your old vehicle is deducted from the taxable amount when calculating sales tax on your new car purchase.
4. Manufacturer’s rebates: While dealer incentives and trade-in allowances reduce the taxable amount, manufacturer’s rebates do not affect the sales tax calculation in Florida.
5. Occasional or isolated sales: Casual or private sales between individuals may be exempt from sales tax if certain conditions are met, such as the seller not being a dealer and the sale being an isolated transaction.
6. Exempt organizations: Certain organizations, such as religious institutions or qualified non-profit organizations, may be exempt from paying sales tax on vehicle purchases when specific criteria are met.

Remember, these scenarios are subject to specific rules and documentation requirements.

Final Thoughts

As always, my advice is to consult with the Florida Department of Revenue or a tax professional to make sure you comply with the applicable regulations and maximize any potential tax savings.

Believe me, it only costs time to get it right but it costs real money and time if you get it wrong!