How car sales tax works in Maryland
Maryland does not charge sales tax on cars. Instead it charges a 6.5% motor vehicle excise tax when the car is titled. The rate went up from 6% on July 1, 2025. Counties and cities cannot add to it, and the minimum tax is $100.
- Trade-in credit: the trade-in allowance is subtracted before tax.
- Manufacturer rebates do not reduce the tax. They stay in the taxable price. A dealer discount does lower it.
- The dealer processing charge is taxable and capped at $800. It must appear on the contract as a charge not required by law.
- Private sales: a car 7 or more model years old is taxed on the price or $640, whichever is higher. A newer car is taxed on the book value if the price is $500 or more below it, unless you file the MVA's notarized bill of sale.
- Family gifts to a spouse, child, grandchild, parent, sibling, grandparent or in-law are exempt if no money is involved.
- New residents (within 60 days) get credit for tax paid in another state and pay the difference, at least $100.
Title and registration fees in Maryland
| Fee | Amount |
|---|---|
| Title | $200 |
| Registration, up to 3,500 lb (2 years, incl. EMS) | $241 |
| Registration, 3,501 to 3,700 lb (2 years) | $251 |
| Registration, over 3,700 lb (2 years) | $383 |
| Lien filing (financed) | $40 |
| Zero-emission vehicle surcharge (per year, before inflation adjustment) | $125 |
| Plug-in hybrid surcharge (per year, before inflation adjustment) | $100 |
Registration is issued for 2 years and depends on the car's shipping weight, so a heavy SUV costs much more to register than a compact car. Each total includes the $40-per-year EMS surcharge. The EV and plug-in surcharges are adjusted for inflation each year.
Example: a $32,000 new car
Price $32,000.00, $1,000.00 manufacturer rebate, $8,000.00 trade-in and a $800.00 doc fee, bought from a dealer:
| Motor vehicle excise tax (6.5%) | $1,612.00 |
| Title fee | $200.00 |
| Registration fee | $241.00 |
| Total taxes | $1,612.00 |
|---|---|
| Total government fees | $441.00 |
| Out-the-door price | $33,853.00 |
| After the trade-in, you pay | $25,853.00 |
Common mistakes
- Using the old 6% rate: Maryland's excise tax has been 6.5% since July 1, 2025.
- Subtracting a manufacturer rebate before calculating the tax (Maryland includes it in the taxable price).
- Paying a dealer processing charge above the $800 legal cap.
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