Here are some key points regarding sales tax on automobiles purchased from individuals in Tennessee:
1. No Sales Tax: When you buy a vehicle directly from an individual (non-dealer) in Tennessee, you are not subject to state sales tax on the purchase. This exemption applies regardless of the value or type of vehicle involved.
2. Dealer Purchases: If you are buying a vehicle from a registered car dealership in Tennessee, sales tax will apply to the transaction. The dealer is responsible for collecting and remitting the sales tax to the state.
3. Title and Registration Fees: When purchasing a vehicle from a private individual in Tennessee, you will need to pay applicable title and registration fees to the Department of Motor Vehicles (DMV) to complete the transfer of ownership. These fees typically include a title transfer fee, registration fee, and any applicable local taxes or fees.
4. Bill of Sale: When buying a vehicle from a private seller, it's important to obtain a bill of sale. The bill of sale should include the names and addresses of both the buyer and seller, a detailed description of the vehicle (make, model, year, VIN number), the purchase price, and the date of the sale. This document serves as proof of purchase and helps facilitate the title transfer process.
In summary, if you are buying a used car from a private individual in Tennessee, you are not subject to sales tax on the transaction. However, you will still need to pay title and registration fees to complete the transfer of ownership.
