Overview
Two Tennessee-specific wrinkles change the base you're taxed on: dealers subtract a like-kind trade-in before applying any of the three layers, and private-party sales priced at 75% or less of the vehicle's NADA book value can get re-based to that book value by the county clerk if the price looks like an attempt to dodge tax. Family transfers - spouse, parent/child, grandparent/grandchild, great-grandparent/great-grandchild, and siblings - skip all three tax layers entirely with the right affidavit.
01 - Official fees
Tennessee car sales tax fees at a glance
| Fee | Amount | Notes |
|---|---|---|
| State sales tax | 7% | full price, dealer and private sales |
| Local option tax | 2.25%–2.75% | first $1,600 only - max $36 to $44 |
| State single article tax | 2.75% | $1,600–$3,200 slice only - max $44 |
| Dealer sale base | price − trade-in | |
| Private sale base | your price (or NADA value if price ≤ 75% of it) | |
| Qualifying family transfer | $0 | spouse, parent/child, grandparent/grandchild, great-grandparent/great-grandchild, sibling |
Figures verified June 2026 against official sources (listed below). Always confirm the final amount with your county clerk (TN Dept. of Revenue) - counties can add small local fees.
03 - Same state, other costs
More Tennessee vehicle costs
04 - Common questions
Tennessee car sales tax FAQ
How much sales tax do I actually pay on a $20,000 car in Tennessee?
In a 2.25%-local county: $1,400 state tax + $36 local tax + $44 single article tax = $1,480 total, an effective rate of 7.4% - well under the advertised 9.25% combined rate, because the local and single-article layers are capped in dollars, not percent.
Why did the county clerk tax me on more than what I paid for a used car?
If you bought private-party and the price you reported is 75% or less of the vehicle's N.A.D.A. Official Used Car Guide value, Tennessee lets the clerk assess tax on the book value instead of your price - it's meant to catch under-the-table price reporting, not genuinely low sale prices, but you may need documentation (condition, mechanical issues) to support a below-book deal.
Does trading in my old car actually lower the tax?
Yes, at a dealership. Tennessee computes tax on price minus the trade-in's value, provided the trade-in is a "like kind" vehicle and it's listed by year/make/model on your invoice. Private-party sales have no trade-in mechanism - there's no dealer to accept the old vehicle.
Who counts as family for the Tennessee gift tax exemption?
Spouses, parents and children (including step and adopted), grandparents and grandchildren, great-grandparents and great-grandchildren, siblings, and the spouse of anyone on that list. Both parties sign the Affidavit of Non-Dealer Transfer of Motor Vehicles and Boats (Form RV-F1301201) and file it with the county clerk - the transfer then owes no sales tax at all.
What if I give a car to a friend instead of a relative?
Tennessee doesn't recognize a 'gift' for tax purposes outside the qualifying family list. A transfer to a friend, cousin, or in-law is taxed like any sale - usually $0 if you report it accurately as a $0-price transfer, but the clerk can still apply the 75%-of-NADA-value rule if the reported price looks understated relative to the car's real worth.
Is there sales tax on a car I bought out of state and am now titling in Tennessee?
Tennessee gives credit for sales tax legitimately paid to another state, up to what Tennessee would have charged. If you paid less there than Tennessee's 7%+local+single-article total, you owe the difference when you title the vehicle here.
05 - Receipts
Official sources
Every number on this page comes from these documents - check them yourself.