Category Archives: Texas Sales Tax

How is Sales Tax figured on new vehicle purchases in Texas?

Texas has a 6.25% state sales tax on new and used vehicle purchases. The 6.25% is based on the selling price of the vehicle less any trade-in value.

Example 1: New vehicle without trade-in

$20,000 new Nissan

Your Texas state sales tax is $1,250

Example 2: New vehicle with trade-in

$20,000 new Nissan

$4500 trade in

$15,500 trade difference upon which the sales tax is figured at 6.25%

Your Texas state sales tax is $969, which is 6.25%

In Texas, unlike many other states, you only pay taxes on the trade difference.