State Sales Tax Calculation
When you purchase a vehicle in Florida, the state levies a standard six percent sales tax on the transaction. This tax is calculated based on the final taxable amount of the sale. The taxable amount is determined by taking the selling price of the vehicle and adding any taxable dealership fees. If you are trading in a vehicle, Florida law provides a tax advantage.
The value of your trade-in is deducted from the selling price before the sales tax is calculated. For example, if you buy a vehicle for twenty thousand dollars and trade in a vehicle worth five thousand dollars, you only pay the six percent tax on the remaining fifteen thousand dollars. This trade-in tax credit can result in substantial savings, making it an important factor when deciding whether to trade in a vehicle or sell it privately.
County Discretionary Sales Surtax
In addition to the state's six percent tax, most counties in Florida impose a discretionary sales surtax. This surtax typically ranges from half a percent to one and a half percent, depending on the county where the vehicle will be registered. Importantly, this county surtax is capped. According to the Florida Department of Revenue, the local surtax only applies to the first five thousand dollars of the vehicle's purchase price.
Therefore, the maximum county surtax you will pay on any single vehicle purchase is capped at a fixed dollar amount based on your county's rate, regardless of how expensive the vehicle is. The state portion of the tax remains uncapped and applies to the full taxable amount. The dealership is responsible for calculating the correct tax rate based on the buyer's home address, collecting the funds, and remitting them to the state.