Yes, you can and should tax your car immediately after buying it. In most states, you cannot legally drive the vehicle without valid registration and paying the associated sales tax. The process typically starts at the point of sale. If you buy from a dealership, they often handle the tax and title paperwork for you, submitting the payment to the state's Department of Motor Vehicles (DMV). If you buy from a private seller, you are responsible for visiting your local DMV office to complete the title transfer and pay the tax yourself, usually within a short, state-mandated deadline.
The specific tax you pay is usually a sales tax or use tax, calculated as a percentage of the purchase price. The rate varies significantly by state and even by county or city. Failing to pay this tax on time can result in penalties, fines, and an inability to register the car, leaving you with a vehicle you can't legally drive.
Here is a comparison of the process and deadlines in a few states:
| State | Typical Tax/Title Deadline (Private Sale) | Sales Tax Rate (Approximate) | Dealer Handling? |
|---|
| California | 10 days | 7.25% - 10.25% (varies by county/city) | Yes, typically |
| Texas | 30 days | 6.25% | Yes, typically |
| Florida | 30 days | 6% | Yes, typically |
| New York | 14 days | 4% (state) + local rates (varies) | Yes, typically |
| Colorado | 60 days | 2.9% (state) + local rates (varies) | Yes, typically |
When you go to the DMV, bring the signed title, a bill of sale, your driver's license, proof of insurance, and an odometer disclosure statement. The DMV will calculate the exact tax owed. Some states offer online services for title transfers, but an in-person visit is often required for a newly purchased vehicle. The key is to act quickly to avoid complications.
