['Fleet Taxes']
['Fleet taxes']
09/07/2024
Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.
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State Comparison
State
Sales tax
Notes
Exemptions
2.00%
The general state sales tax rate is 4 percent. A 2 percent sales tax rate is applied to the purchase of automotives.
If a vehicle is purchased in another state but will be licensed in Alabama, and the sales or use tax is equal to or greater than the Alabama tax amount, additional tax will not be charged. If a vehicle is purchased in another state but will be licensed in Alabama, and the sales or use tax is less than the Alabama tax amount, the difference between taxes paid in the other state and the Alabama tax amount must be paid.
5.60%
Arizona imposes a vehicle license tax, transaction privilege tax, and use tax. Rates may vary depending on the type of business activity, the city, and the county.
If a motor carrier pays the motor carrier fee, then the carrier is exempt from the transaction privilege tax. A use tax is assessed on vehicles purchased or registered in Arizona. If the carrier paid the vehicle sales tax in another state, at a rate equal to or greater than the use tax rate charged by Arizona, then the carrier has no further tax to pay. If the sales tax paid out–of–state is less than that charged by Arizona, then the motor carrier must pay the difference to Arizona.
Some of the exemptions to the use tax include:
- If motor fuel is subject to the AZ fuel excise tax, then payment of sales tax is exempt.
- Repair labor is not taxable providing it is listed separately on the invoice.
6.50%
The general state sales tax rate is 6.50 percent. However, some purchases of used vehicles have a tax rate of 3.50 percent.
Sales tax is not collected on Class 6 or Class 7 trucks registered under the International Registration Plan, or on semitrailers. The seller of any type of motor vehicle does not collect the use tax from the sale. Instead, the purchaser pays the use tax directly to the Department of Finance and Administration.
Owners of vehicles purchased outside of Arkansas must pay the Arkansas sales tax unless the vehicle was registered and licensed in another state prior to registration within Arkansas.
7.25%
The general state sales tax rate is 7.25 percent. However, the vehicles sales tax rate is 7.50 percent, of which 1.25 percent goes to the county government.
California will allow credit for sales tax paid to another state, which will only require the consumer to pay the difference in the tax should California's tax rate be higher.
A truck or trailer purchase may qualify for an exemption if the vehicle is purchased for use in interstate or foreign commerce.
The sale of a new truck or trailer with an unladen weight of 6,000 pounds or more, or a new trailer coach or auxiliary dolly, purchased from an out-of-state dealer for the use outside of California, is exempt from sales tax if the property is delivered to the purchaser in California by the manufacturer, and the purchaser removes such vehicle out-of-state within 30 days.
The sale of a new trailer or semitrailer with an unladen weight of 6,000 pounds or more that is purchased for use outside of California, or for use exclusively in interstate and/or foreign commerce, but delivered to the purchaser inside California, is exempt from tax if:
- The vehicle is manufactured outside of California and the purchaser removes the property from California within 30 days of delivery; or
- The vehicle is manufactured in California and the purchaser removes the vehicle from California within 75 days of delivery.
2.90%
Sales tax rates are 2.90 percent. Specific ownership tax rates go up to 2.10 percent.
Government vehicles and mobile homes are exempt from the specific ownership tax.
If a vehicle is brought in from another state to be licensed in Colorado, any sales or use tax paid in the other state will be taken into consideration when the vehicle is registered.
Refunds of sales/use tax may be available for commercial vehicles used in interstate commerce.
The Special Mobile Machinery 2 Percent Registration Exempt Program allows companies with 250 pieces or more of special mobile machinery, who participate in the program, to apply for registration exemption.
Low emitting heavy vehicles (LEV) certified by the EPA are exempt from state sales and use tax.
6.35%
On vehicles purchased out of state, and being registered for the first time in Connecticut, credit will be allowed for any sales tax paid to the state where the vehicle was purchased.
Out-of-state carriers wishing to purchase vehicles in Connecticut to be registered out-of-state are exempt from paying the sales and use tax.
Sales and use tax doesn't apply to the sales of and storage, use or other consumption of commercial trucks, truck tractors, tractors, semitrailers, or combinations of those vehicles, that have a gross vehicle weight rating of more than 26,000 pounds, or that are operated actively and exclusively during the period starting with the purchase and ending one year after the date of purchase for interstate freight according to operating authority issued by the FMCSA.
To qualify for the exemption, purchasers must present the retailer with a copy of the FMCSA operating authority and certificate certifying that the vehicle will be operated actively and exclusively for carrying interstate freight.
5.75%
NA
Motor vehicles and trailers, subject to the excise tax for issuance of certificates of title, are exempt from the sales tax.
Sales upon which the sales tax has been paid are exempt from the use tax. The use tax is 5.75% of the sales price of taxable tangible personal property.
Normally transportation services are not taxed, but when tangible personal property such as motor vehicles or trailers are rented, the use tax is due for the rental period during which the property is within the boundaries of DC.
6.00%
Additional local taxes may apply.
Vehicles used by common carriers in interstate commerce are subject to the FL sales tax only on the ratio of intrastate FL mileage to the interstate mileage traveled by the carrier during the previous year (partial sales tax exemption). Repairs, parts, and other items used on vehicles used for-hire in interstate commerce may be eligible for partial sales tax exemptions.
Transportation of property for hire is considered a professional service in FL and is therefore not subject to sales tax.
4.00%
NA
If the vehicle is manufactured or assembled within Georgia but purchaser will be using the vehicle exclusively out-of-state, the vehicle is not subject to the sales tax.
If a motor vehicle is used principally in transporting cargo by a common carrier or a common or contract carrier holding authority in interstate or foreign commerce, the purchase is not subject to sales or use tax. Replacement parts installed in such vehicles, which become integral parts of the vehicles, are also exempt from Georgia sales and use tax.
The service of transporting property for-hire is not subject to the sales or use tax.
If sales or use tax has been paid to some other state or jurisdiction on a transaction which is also subject to Georgia sales or use tax, credit will be allowed for that payment.
4.00%
NA
If the seller is licensed in Hawaii, and therefore subject to the general excise (gross income) tax, the use tax levy does not apply.
6.00%
NA
If property is subject to the use tax, but a sales or use tax has already been paid in another state at a rate equal to or exceeding the Idaho rate, the Idaho tax will not be assessed.
There are some specific exemptions from the sales and use tax in Idaho. Any purchase already subject to the Idaho motor fuels tax, or on which sales tax has already been paid in another jurisdiction, is exempt from the tax. Sales of motor vehicles for use outside Idaho, even though delivery is made in Idaho, are also exempt.
The IRP exemption is available to certain Idaho motor vehicle and trailer buyers and applies to the purchase of trailers or motor vehicles with a gross weight exceeding 26,000 pounds used in interstate commerce if the vehicle will be immediately registered under the IRP and at least 10 percent of the total fleet mileage is spent outside of Idaho.
6.25%
NA
The rolling stock exemption provides tax relief to interstate for-hire motor carriers on rolling stock operating in interstate commerce.
7.00%
NA
Vehicles purchased within Indiana, but which will be registered in another state, are exempt from the Indiana sales tax. New vehicles purchased outside Indiana and brought in for titling and registration are subject to the tax.
Cargo trailers purchased within Indiana and registered in another state may be exempt from sales tax.
Transactions involving tangible personal property and services are exempt from Indiana sales tax if the person acquiring the property or service directly uses or consumes it in providing public transportation for persons or property.
6.00%
NA
If possession of tangible personal property is taken in another state and tax has already been paid to the other state, the purchaser must pay the difference to Iowa if the tax rate was less than the Iowa tax rate.
Tax exemptions exist for services related to interstate commerce, motor fuel, and purchases of vehicles to be used in interstate commerce.
6.50%
Additional local taxes may apply.
Transportation of property for hire is not subject to sales tax.
The sale of new or used rolling stock (including buses, trucks, and trailers), as well as the repair or replacement materials and parts, purchased by a motor carrier for immediate and direct use in interstate commerce is exempt from Kansas sales tax.
6.00%
Additional local taxes may apply.
The sale of services is not taxed.
Over the road equipment used exclusively in interstate commerce in Kentucky is exempt from the sales/use tax. If sales/use tax has been paid to another jurisdiction, and there is a reciprocal agreement between that state and Kentucky, credit will be allowed for the amount of tax paid to the other jurisdiction.
There are exemptions for the repair and replacement parts for trucks 44,001 pounds or more. The exemption applies to repair and replacement parts for the direct operation or maintenance of a motor vehicle, including any towed unit, used exclusively in interstate commerce for the conveyance of property or passengers for hire.
4.45%
Additional local taxes may apply.
Providing transportation services for hire is not one of the enumerated services, so the income from such services is exempt from sales tax.
The sales and use tax does not apply to certain qualified trucks and trailers.
A credit against the use tax due in Louisiana is granted to taxpayers who have already paid a similar tax in another state.
5.50%
NA
Maine will allow credit for sales tax paid on a vehicle out-of-state.
The sale of certain vehicles is exempt from sales tax if placed in use by the purchaser as an instrumentality of interstate commerce within 30 days of purchase and is used at least 80 percent of the time for the following two years.
6.00%
NA
MD exempts the sale of transportation services from tax, as well as vehicle and liquid fuels which are already taxed, and new or used motor vehicles subject to an excise titling tax under the Motor Vehicle Code or which will be titled or registered in another state.
The sale or a sale for use of a motor vehicle that is used in interstate or foreign commerce and a sale or a sale for use of a replacement part or other tangible personal property to be used physically in, on, or by it, are exempt from the tax.
6.25%
NA
Sales tax does not apply to sales of transportation services.
A use tax will not be charged if the sale is already subject to the sales tax in Massachusetts or if sales tax has already been paid to another state on the purchase, provided that the other state grants reciprocity to Massachusetts and the tax charged was at least as much as would be due in the Commonwealth.
6.00%
NA
The tax applies to diesel fuel, except if it is used in passenger vehicles with 10 or more person capacity operated for-hire in the state.
Property already subject to a state or local sales tax equal to or more than that required by Michigan is exempt from the Michigan use tax.
The sale of rolling stock purchased by an interstate motor carrier or for rental or lease to an interstate motor carrier and used in interstate commerce is exempt from sales tax.
6.875%
NA
Motor carriers that transport goods or passengers interstate may qualify for sales tax reductions on the equipment used in such transportation. The reduced sales tax applies to leases or purchases of vehicles or repair parts and accessories. When a motor carrier buys equipment, a prorated tax will be collected at the time the vehicle is registered. To qualify for the reduced sales tax for vehicle leases and repair parts and accessories, a motor carrier must apply for a Motor Carrier Direct Pay (MCDP) authorization.
Equipment subject to the reduced tax includes:
- The leases of trucks, tractors, and trailers used in interstate transportation;
- Refrigeration equipment, tires, batteries, padlocks, repair parts, communication equipment; and
- Other items attached to the mobile transportation equipment.
7.00%
NA
Vehicles are taxed at a rate of 3 - 5 percent.
Certain sales of vehicles are exempt from sales and use tax if removed from Mississippi within 48 hours of purchase.
Mississippi allows credit for tax on an item paid to another state.
4.225%
NA
Certain vehicles engaged in the transportation of people or property — as well as materials, replacement parts, and equipment for direct use on the vehicles — are exempt from sales and use tax.
Railroad rolling stock for use in transporting people or property in interstate commerce is also exempt.
NA
Montana does not have a state sales tax and does not levy local sales taxes.
Trailers and semitrailers are exempt from the new vehicle sales tax in Montana.
5.50%
Motor carriers operating under common or contract authority are allowed to apply for a certificate of exemption, which exempts the carrier from paying sales and use tax on motor vehicles, trailers or semitrailers used in the carrier’s business operation.
Credits are allowed for any sales or use tax paid to another state, if that state has reciprocal credit for NE.
6.85%
Additional local/county taxes may apply.
Nevada does allow credit for tax paid to another state.
Charges for freight, transportation, or delivery in connection with the sale of tangible personal property separately stated to the end user are exempt from sales tax.
6.625%
NA
The New Jersey sales tax exemption allows motor carriers to purchase, rent, or lease heavy commercial vehicles without having to pay the sales tax. The exemption is restricted to New Jersey registered commercial vehicles which are used in combination and have a gross weight rating over 26,000 pounds, or are registered farm vehicles over 18,000 pounds.
The exemption covers all tractors, trucks, truck tractors, semitrailers and any repair or replacement parts for such vehicles.
NA
New Mexico imposes a gross receipts tax, instead of a sales tax, at a rate of 5.125 - 8.8675 percent. Internet sales are taxed at a 5.125 percent rate.
New Mexico allows a credit against tax paid on any property purchased outside New Mexico on which gross receipts, sales, or use tax has already been paid to another state.
4.00%
Additional local/county taxes may apply.
Motor carriers who purchase, rent, or lease tractors, trailers, or semitrailers which have a gross vehicle weight of more than 26,000 pounds, are exempt from paying New York and local city/county sales and use taxes.
Parts installed on exempt vehicles for their equipping, maintenance, or repair, as well as related installation, maintenance, and repair services performed on these vehicles are also exempt from sales and use tax.
Any non–exempt vehicle delivered within New York to a resident, is subject to tax at the rate in effect in the locality of the purchaser’s place of business, plus the state sales tax. Credit is allowed for sales or use tax paid to out–of–state jurisdictions.
4.75%
NA
Motor vehicle service contracts are exempt from the sales and use tax. Interstate carriers may obtain a refund for a portion of the state and local sales tax on purchases of fuel, lubricants, repair parts, accessories, and repair, maintenance, and installation services for motor vehicles.
5.00%
NA
Motor carrier vehicles in excess of 20,000 pounds gross weight, whether owned or lease, engaged in interstate commerce to the extent their revenue from interstate hauling bears to their total revenue from hauling for the preceding operating year are exempt from the excise tax.
5.75%
Additional local/county taxes may apply.
Motor vehicles used primarily in transporting tangible personal property for others, as well as certain costs and parts associated with the vehicles, may be exempt from the sales and use tax.
4.50%
Additional local/county taxes may apply.
Transportation for-hire is exempt from sales tax if the transportation services are provided by a tourism service broker, the transportation services are provided by funeral establishments for purposes of conducting a funeral, or the transportation services are sales of intrastate charter and tour bus transportation.
Property already subjected to a sales tax in another jurisdiction is exempt from the Oklahoma use tax, if that other jurisdiction grants sales tax reciprocity to Oklahoma purchases.
6.00%
Additional local/county taxes may apply.
Retail sales of motor vehicles, trailers, or semitrailers to non–residents are exempt from sales tax.
Pennsylvania allows credit for sales tax paid to another jurisdiction if that state grants similar credit to the state.
7.00%
NA
The purchase or rental/lease of a truck or trailer by a trucking company that transports goods for-hire is not subject to sales and use tax provided such vehicle is to be used exclusively in interstate commerce.
The purchase or rental/lease of a bus by a busing company that transports passengers for-hire is not subject to sales and use on the condition that the bus is used 80 percent or more of the time in interstate commerce and provided that the bus company furnishes a completed “Affidavit of Truck, Trailer or Bus Operated in Interstate Commerce” to the Registry of Motor Vehicles.
6.00%
Additional local/county taxes may apply.
In place of a state sales tax, the sale of motor vehicles, trailers, and semitrailers are subject to the infrastructure maintenance fee.
4.20%
Additional local/county taxes may apply.
A 4 percent excise tax is charged on the purchase price of any motor vehicle required to be registered within South Dakota.
Interstate movements are exempt from sales tax.
7.00%
Additional local/county taxes may apply.
Tennessee does allow credit for sales and use tax already paid to another state, provided it is equal to or greater than the Tennessee tax liability.
Tennessee law allows a buyer purchasing a motor vehicle within the state up to three days to remove the motor vehicle to another state without having to pay sales and use tax on the purchase.
Class 3 motor vehicles, as well as trailers, semitrailers, and pole trailers used principally in interstate commerce, are exempt from sales tax.
6.25%
NA
Tractors, trucks, truck tractors, trailers, and charter buses which meet all requirements are exempt from motor vehicle tax.
Texas allows credits for sales or use tax on an item paid to another state, if the state allows reciprocity to Texas.
4.70%
Additional local/county taxes may apply.
Utah gives credit for sales or use tax paid on property to other jurisdictions.
There are sales and use tax exemptions for the sale, lease, or use of a vehicles by an authorized carrier, as well as tangible personal property installed on a vehicle prior to being placed in service that is sold, leased, or used by an authorized carrier.
Vehicles which are IFTA qualified, registered under the IRP, and intended for intrastate travel may be exempt from sales tax.
6.00%
NA
Vermont allows credit for payments of sales or use tax to other jurisdictions.
Sales of transportation services are typically exempt from sales and use tax within the state.
5.30%
Additional local/county taxes may apply.
Virginia grants credit for sales or use tax paid to another state.
A motor vehicle that has seats for more than seven passengers and is sold to a restricted common carrier or common carrier of passengers is exempt from sales tax.
Buses, trucks, tractors, and trailers with a manufacturer's gross vehicle weight rating (GVWR) or gross combination weight rating of 26,001 pounds and above, if registered in Virginia, are exempt from sales and use tax.
6.50%
An additional 0.3% is also imposed on the sale, rental, or lease of a motor vehicle, including commercial trucks and buses.
Additional local taxes may apply.
Any vehicle sold to a non-resident to be taken directly out of the State of Washington and not registered in the state is exempt.
There is an exemption from the use tax for vehicles purchased in Washington for the use of any motor vehicle or trailer while being operated under the authority of a trip permit and moving from the point of delivery in Washington to a point outside of Washington.
Sales of motor vehicles or trailer used for transporting persons or property for-hire are exempt from sales tax if all requirements have been met.
6.00%
NA
Credit is allowed for sales or use taxes paid to another state with respect to the purchase.
Certain Class B, Class C, and passenger vehicles are exempt from sales tax.
There is a sales tax exemption for gasoline or special fuel purchased by an interstate carrier that has fuel storage tanks within the state for its own use, providing delivery is made in quantities of at least 1,000 gallons.
5.00%
Additional local/county taxes may apply.
Motor vehicles and truck bodies purchased by non-residents are exempt from sales tax.
Common and contract carriers are exempt from tax on certain purchases and services.
4.00%
Additional local/county taxes may apply.
The following are exempt:
- Interstate transportation of freight or passengers;
- Sales of trucks, truck-tractors, trailers, semitrailers, and passenger buses in excess of 10,000 pounds gross vehicle weight which are purchased by common or contract interstate carriers or which are operating in interstate commerce under exemption clauses in federal law if they are to be used in interstate commerce; and
- Leases of motor vehicles with or without trailers when the lease rental is computed from the gross receipts of the operation, if the operator is operating under a valid interstate authority or permit.
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Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.