Buying a new or used car is an exciting experience, but it also comes with financial responsibilities, including sales tax. In Nevada, understanding the intricacies of car sales tax is essential to ensure a smooth and cost-efficient purchase. 

Here at United Nissan Reno, we’re all about keeping our customers well-informed throughout the car buying process. That’s why today we’re going to demystify how sales tax works in Nevada, tackle those frequently asked questions about car sales tax, and even bust a few car-buying myths. So, let's get started:

Whether you’re eyeing a brand-new vehicle or a reliable used car, it’s important to be aware of Nevada’s standard car sales tax rate of 4.6%, applicable to all car purchases statewide. However, the final tax amount you pay will also include the rates based on county and local taxes from where you purchase. These rates vary depending on the location of your purchase and on average, will typically push the total tax rate to around 8%.

To give you a clearer picture, here are the combined sales tax rates (state and county) for all counties in Nevada. We'll start with the three most densely populated ones at the top:

In Nevada, the applicable sale tax rate is charged based on the county where the actual sale occurs, not where the purchaser resides. That means if you purchase a vehicle in Reno, but live in Carson City, for example, you will pay the Reno sales tax rate

Here is a quote directly from The Department of Taxation in Nevada, “Any sale in one county is subject to that county’s sales tax rate regardless of the fact that the purchaser is a resident of another county. Where the sale takes place determines the rate of taxation.” 

Now, you might be wondering, "How much of a difference does this actually make?" Stick around, and we'll break down real-life purchasing scenarios shortly!

Are you considering trading in your vehicle? Well, good news, it will pass on additional savings to your pockets! 

In Nevada, the trade-in of a vehicle towards the purchase of another car reduces the purchase price by the trade-in's value. In simpler terms, if you are buying a car worth $20,000 but are trading in your vehicle for a credit worth $5,000, then only the sales price of $15,000 will be subject to auto sales tax. 

In Nevada, the trade-in of a vehicle towards the purchase of another car reduces the purchase price by the trade-in's value. In simpler terms, if you are buying a car worth $20,000 but are trading in your vehicle for a credit worth $5,000, then only the sales price of $15,000 will be subject to auto sales tax. 

This means that you save the sales taxes you would otherwise have paid on the $5,000 value of your trade-in. The only exception to this is the trade-in of a leased vehicle, which has no effect on the sales tax computation. 

So, do you have to pay car sales tax on rebates? In short, no. Here is what the Department of Taxation has to say on rebates and dealer discounts:

• Rebates: Manufacturer Rebates do not affect the sales tax on the selling price of a vehicle. This is a form of payment.
  
  
• Dealer Discounts: Dealer discounts are considered discounts and are not taxable. It reduces the selling price of the vehicle.

Follow these steps to find how much you will pay in sales tax on your vehicle:

1.  If applicable, deduct your trade-in value from the vehicle’s sticker price.
2.  Locate your county’s total sales tax rate using the chart above. If you plan on purchasing in Reno, it will be 8.265%. 
3.  Lastly, multiply the deducted sticker price by the overall tax rate. 

Naturally, one might assume it’s best to purchase their vehicle at a dealership in a county with the lowest tax rate. But, does that actually equate to more savings? 

Let’s break the sales tax you’d pay on a $20,000 vehicle in Carson City vs. Reno, Nevada.

Note: This is only calculated to include sales tax costs and does not include doc fees, title fees, or registration costs. 

Washoe (Reno): 8.265% Tax Rate

• Total Sales Tax = $20,000 (Vehicle Price) x 8.265% = $1,653
• Cost = $21,653

Carson City: 7.6% Tax Rate

• Total Sales Tax = $20,000 (Vehicle Price) x 7.6% = $1,520
• Cost = $21,520

So, for a $20k vehicle, the tax equates to a $133 difference. While that’s not something to overlook, it’s important to consider the entire value of when you're purchasing a vehicle. Saving money on the sales tax is just one part of the equation, and it's wise to factor in other key elements that contribute to your overall cost and experience. 

✔︎ No Dealer Markups: Our promise to you is that you’ll never pay more than necessary.  

✔︎ Never-Ending Warranty: Our Never-Ending Warranty covers repairs on your powertrain for unlimited time and unlimited miles. Think about how much that can save you on future repairs. 

✔︎ Smooth, efficient process: They say “time is money,” and there’s a reason we’re one of Nevada’s top-rated dealers. We take pride in providing a seamless and efficient car-buying experience so you spend less time dealing with paperwork and more time enjoying your new vehicle.

✔︎ Higher trade-in valuations: We pay top dollar for trade-ins, which means more cost-saving benefits are passed on to you.

✔︎ Tax Rate Matching: We will give you a discount equivalent to the difference in tax rate from where you live and our store. This is in addition to all other discounts. No gimmicks, no tricks, just great deals.

In light of these additional advantages, it becomes clear that the small difference in sales tax may not outweigh the benefits of choosing United Nissan Reno for your car purchase. When you factor in the potential savings from avoiding dealer markups and the long-term financial security of our Never Ending Warranty, purchasing in Reno might be the smarter and more cost-effective choice!