New Hampshire doesn’t have a car sales tax, but there are other taxes and fees you’ll need to pay. There are also things you need to know if you’re thinking about buying a car out of state.
Table of Contents
This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.
There is no NH car sales tax.
The reason you don’t have to pay sales tax when you buy a car in New Hampshire is pretty simple. New Hampshire is one of only five states that doesn’t have a general sales tax.
Since there’s no state sales tax, there’s no car sales tax, either.
What do you have to pay when you buy a vehicle in New Hampshire?
When you buy a car from a New Hampshire dealership, you generally won’t have to pay any taxes. You do need to pay registration fees either through the dealer or on your own.
Some people consider the registration fee a tax, but it’s a flat fee that’s not based on what you paid for your car.
Does New Hampshire have a property tax on motor vehicles?
New Hampshire does have a property tax on motor vehicles. This is not a sales tax, and you don’t pay it at the time of a car purchase.
Under the property tax, you have to pay taxes each year based on how much your car is currently worth. It’s similar to paying real estate taxes.
Car property taxes are based on the current book value rather than the purchase price.
Can you buy a car in New Hampshire to avoid paying sales tax?
If you live outside of New Hampshire, you usually can’t buy a vehicle in New Hampshire to avoid paying sales tax.
The usual rule is that when you buy a car out of state, you have to pay your state the difference between your home state’s sales tax and any sales tax you paid in the state where you bought your car. Since New Hampshire has no car sales tax, you’ll have to pay your state’s full sales tax.
This is also usually the rule for online purchases or shopping trips in another state. Many people ignore that rule, but a vehicle purchase is different.
Since you have to register your vehicle, your state knows that you bought it, where you bought it, and how much sales tax you already paid. It’s very easy for your state to know how much sales tax you owe them, and many places won’t register your car until you make your tax payment.
You may also be aware that some states have a different sales tax rate for a new car or used car or only charge sales tax on a new vehicle. Since New Hampshire has no car sales tax at all, you’ll generally need to pay your state according to its car sales tax rate for the type of vehicle you purchased.
Can you register your car in New Hampshire to avoid paying sales tax?
You generally need to register your car where you live or where you keep it most of the time. For example, if you have a car that you keep at your second home, you may be able to register it there instead of your primary residence.
If you try to use someone else’s address to register your car to avoid taxes, there could be serious consequences if you get caught. This can include back taxes and penalties, being cited for not properly registering your vehicle, and possibly losing your insurance coverage.