If you live in Texas, and buy a car out of state, do you still have to pay taxes when titling it?

Question

I want to buy a used car from New York that is quite expensive. I wanted to see if I still had to pay taxes so that I could factor that into the cost of buying the car as well.

Thanks!

=]

Answer 1

Yes.  TX levies the State Use Tax based upon the higher of the Blue Book value of the vehicle or the Bill of Sale price UNLESS you purchase it from a TX licensed dealer.  If you purchase from a TX licensed dealer, the Bill of Sale price is used.  

Since you are buying from out of state, the tax will be based upon the Bill of Sale or the Blue Book, whichever is higher.

If you paid any Sales or Use tax to the State where you purchased it, TX will allow you a credit for that tax against the TX tax liability.

Answer 2

Make sure that you bring your original purchase paperwork with you when you register the car.  I'm guessing that you will have to pay any use tax when you register the car with the DMV.

ETA:  If you are financing the vehicle, add an additional 8.25% to your loan to pay any TX sales tax that may be due.