How car sales tax works in Indiana
Indiana charges a flat 7% sales tax on cars. There is no local sales tax on vehicles, so the rate is the same in every county.
- Trade-in credit: a car you own and trade in as part of the same deal is subtracted before tax.
- Manufacturer rebates do not reduce the tax, whether you keep the rebate or assign it to the dealer. A dealer discount does lower it.
- The doc fee is taxable. The state will not act against doc fees of $261.72 or less (from July 1, 2026), and the fee must appear on its own line on the bill of sale.
- Private sales: you pay 7% of the price at a BMV branch when you title the car, within 45 days.
- Gifts and inheritances with no payment are exempt. New residents do not pay sales tax when they transfer their own car's title to Indiana.
Title and registration fees in Indiana
| Fee | Amount |
|---|---|
| Title | $15 |
| Passenger registration (per year) | $21.35 |
| Transportation infrastructure fee (per year) | $15 |
| Electric vehicle fee (per year) | $242 |
| Hybrid vehicle fee (per year) | $81 |
| Vehicle excise tax, new car, MSRP $30,000 - $34,999 | $406 |
Indiana also charges a vehicle excise tax every year with your registration, including the first one. It depends on the original MSRP and the car's age, not on your price: from $350 to $532 for most new cars. Some counties and cities add a wheel tax or local excise.
Example: a $32,000 new car
Price $32,000.00, $1,000.00 manufacturer rebate, $8,000.00 trade-in and a $261.72 doc fee, bought from a dealer:
| Sales tax (7%) | $1,698.32 |
| Title fee | $15.00 |
| Registration fee | $21.35 |
| Vehicle excise tax (first year) | ≈ $406.00 |
| Transportation Infrastructure Improvement Fee | $15.00 |
| Total taxes | $1,698.32 |
|---|---|
| Total government fees | $457.35 |
| Out-the-door price | $33,417.39 |
| After the trade-in, you pay | $25,417.39 |
Common mistakes
- Subtracting a manufacturer rebate before calculating the 7% tax (Indiana taxes the price before the rebate).
- Forgetting the yearly vehicle excise tax that is due when you first register the car.
- Paying a doc fee above the $261.72 level the state uses for enforcement without asking the dealer to justify it.
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