Motor Vehicle Sales and Use Tax
Effective July 1, 2016, unless exempted under Va. Code § 58.1-2402, Virginia levies a 4.15% Motor Vehicle Sales and Use (SUT) Tax based on the vehicle's gross sales price or $75, whichever is greater. An additional $64 fee applies to electric vehicles, excluding mopeds.
For the purposes of the Motor Vehicle Sales and Use Tax collection, gross sales price includes the dealer processing fee. The gross sales price is the vehicle price after the manufacturers' rebates or manufacturers' incentives. Gross sales price does not include any other price reductions, such as credit for trade-ins, unpaid liens or other unpaid credits.
Collecting the SUT Tax
The Motor Vehicle Sales and Use tax is collected at the time of titling whenever a vehicle is sold and/or ownership of the motor vehicle changes.
Exemptions from the SUT Tax
If you are exempt from the motor vehicle sales and use tax as provided by statute § § 58.1-2403, you may be required to provide proof of your exemption status and complete the Purchaser's Statement of Tax Exemption (SUT3) indicating the reason for exemption. Please note that proof is used to establish eligibility for certain exemptions.
If you are titling your vehicle in Virginia for the first time and you hold a valid assignable title or registration issued in your name by another state or a branch of the United States Armed Forces, you will not have to pay the Motor Vehicle Sales and Use Tax. However, if you purchased the vehicle within the preceding 12 months, you must provide proof that the sales and use tax was paid elsewhere in order to be exempt in Virginia.
Calculating the SUT Tax
For a transaction between private individuals, the minimum Motor Vehicle Sales and Use Tax is calculated based on the trade-in value given in the NADA Official Used Car Guide. You must present either an Affidavit for Procurement of Title (SUT-1A) if the vehicle is 5 years old or newer (based on the model year) or a Bill of Sale if the vehicle is more than 5 years old. (The sale price placed on a title certificate by the seller is the equivalent of a bill of sale.) A bill of sale must be signed by both the seller and the buyer to include the full vehicle description, vehicle identification number and date of sale.