How car sales tax works in Virginia
Virginia charges a 4.15% motor vehicle sales and use tax (SUT) when the car is titled, with a $75 minimum. There is no local sales tax on cars, so the rate is the same everywhere in the state.
- Your trade-in does not reduce the tax. A $40,000 car with a $5,000 trade-in is still taxed on $40,000.
- Manufacturer rebates and incentives do reduce it. The tax is based on the price after rebates are applied.
- The dealer processing fee is taxable. Virginia does not cap it, but the dealer must post the amount on a sign in the showroom and list it on the buyer's order.
- Private sales: you pay 4.15% of the price at DMV. For a car under 5 model years old, DMV asks for a sworn affidavit if the price is more than $1,500 away from the NADA trade-in value.
- Family gifts to a spouse, son, daughter or parent are exempt. Siblings are not on the list.
- New residents pay nothing if they have owned the car more than 12 months, or can show they paid sales tax in another state.
Title and registration fees in Virginia
| Fee | Amount |
|---|---|
| Title | $15 |
| Registration, car up to 4,000 lb (per year) | $30.75 |
| Registration, 4,001 to 6,500 lb (per year) | $35.75 |
| Emissions localities (Northern Virginia) | + $2 |
| Electric vehicle highway use fee (per year) | $135.63 |
| Highway use fee, cars rated 25+ mpg (per year) | $7.05 - $103.48 |
The highway use fee also applies to gas cars and hybrids rated 25 mpg or more: about $28.48 a year at 30 mpg and $71.34 at 50 mpg (rates for July 2026 to June 2027). After you buy, your city or county also bills a yearly personal property tax on the car. It is not paid at the dealer.
Example: a $32,000 new car
Price $32,000.00, $1,000.00 manufacturer rebate, $8,000.00 trade-in and a $899.00 doc fee, bought from a dealer:
| Motor vehicle sales and use tax (4.15%) | $1,323.81 |
| Title fee | $15.00 |
| Registration fee | $30.75 |
| Total taxes | $1,323.81 |
|---|---|
| Total government fees | $45.75 |
| Out-the-door price | $33,268.56 |
| After the trade-in, you pay | $25,268.56 |
Common mistakes
- Subtracting your trade-in before calculating the 4.15% tax (Virginia does not allow it).
- Forgetting that the dealer processing fee is part of the taxable price and has no state cap.
- Not budgeting for the yearly local personal property tax and the highway use fee on fuel-efficient cars and EVs.
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