Owning a car is one of the most important investments that consumers make and the whole process of buying proves to be quite overwhelming. Purchasing a car in Florida, especially when you are from a different state, is another challenge. Fortunately, this is not impossible. What you need to do is know everything that the buying process entails so that you can comply. These include taxes, title, registration fee, insurance, vehicle inspections, price, and ensuring all the dealings are handled legally. When you follow these tips to the latter, you will not regret your purchase. But first, you need to be well-informed for easier transactions. Most importantly, you must know what is the sales tax on cars in Florida
Car Sales Tax in Florida
The sales tax collected in Florida state is usually at 6% for both new and used vehicles. Some car selling companies
require you to register and assemble the car when buying. It shows that when you buy (or sell) a car totaled privately
, the sales tax shifts to you. The Florida Department of Highway Safety and Motor Vehicles commends completing all the transactions at the tax collectors office when you buy a car privately. Here, the staff ensures that you pay the right amount to avoid any culpability in the future.
Calculating Car Sales Tax in Florida
Buying a car from a dealer may come with various incentives and other allowances. So, how is the sales tax calculated in the state of Florida? Here, they deduct all the discounts and exchange stipends offered by the dealer when calculating sales tax. It means they calculate the sales tax off of the full buying price, excluding the discounts. Notwithstanding, the discount offered by the manufacturer is not deducted. While you pay a lesser amount at the dealership, the sales tax doesnt lower.
Calculating the right sales tax requires you to multiply the buying price of the vehicle by the contemporary sales tax rate. For instance, if you are buying a car worth $25,000, the sales tax is $1,500 i.e., $25,000 x 0.06.
The above method is the most common and simplest way to calculate the sales tax. Nevertheless, when the dealership offers plenty of incentives and allowances, the case is usually different. As mentioned earlier that the sales tax in Florida is calculated inclusive of the manufacturer's rebate.
For instance, the advertised price of a car is set at $45,000. The manufacturer gives a $4000 discount, a $2000 seller incentive and a $10,000 exchange allowance. In the end, you part with $30,000 with $15,000 off the marked price.
In the state of Florida, the sales tax is calculated at $34,000. You end up paying $2040 as the cars sales tax which is calculated as $34,000 (buying price + manufacturers rebate) x 0.06 (percentage of the sales tax).
Discretionary Sales Surtax
There are counties in the state of Florida that apply discretionary tax on purchasing a vehicle. The optional sales surtax is applied, adding to the 6 % sales tax. Hillsborough is one of the most crowded counties in Florida with a surtax rate of 2.5%. This means that 2.5% + 6% = 8.5%. 8.5% is the highest tax rate in the whole state of Florida.
If you are looking to purchase a car in Florida, you need to equip yourself with the right information. This includes knowing the sales tax in the state and how to calculate it. Once you obtain the figure for the tax you are required to pay, it becomes easier. This also helps you avoid overpaying the sales tax. With the information above, calculating the sales tax is one headache off the table.