How to Pay Tax on a Private Car Sale in Texas
Purchasing a car from a private seller in Texas means that you are responsible for paying sales tax on the vehicle. Unlike dealership transactions where the tax is collected at the time of purchase, with private car sales, the responsibility for paying sales tax falls on the buyer. Here's how you can pay tax on a private car sale and complete the title and registration process.
Step 1: Gather Necessary Documents
Before you go to the county tax office, it’s important to make sure you have all the necessary documents for the vehicle sale. This includes:
Signed Title: The title of the vehicle signed over by the seller.
Bill of Sale: While not mandatory, having a bill of sale can help document the sale price and the details of the transaction.
Proof of Identity: Your valid identification, such as a driver’s license, will be required.
Form 130-U (Application for Texas Title and/or Registration): This form is necessary to apply for the title and registration of the vehicle. It can be downloaded from the Texas Department of Motor Vehicles (DMV) website or obtained at the county tax office.
Odometer Disclosure Statement: If the vehicle is less than 10 years old, this statement will be required to disclose the mileage.
Step 2: Visit the County Tax Office
Once you have all the necessary documents, head to your local county tax office to file for title and registration. In Texas, the sales tax is paid when you file for the title transfer, not at the time of sale. The county tax office will calculate the sales tax based on the purchase price or the State Presumed Value (SPV) of the car, whichever is greater.
The sales tax rate in Texas is 6.25%, and this amount will be added to the total cost when you register the vehicle. For example, if you purchased a used car for $10,000, the tax would be $625 (6.25% of $10,000).
Step 3: Pay the Sales Tax and Other Fees
At the county tax office, you will need to pay the sales tax, along with any other applicable fees, such as the title transfer fee and registration fees. The total cost will depend on the vehicle’s value, weight, and the county you are registering it in. After paying the taxes and fees, you will receive your new title and registration.