Car taxes and fees in Tennessee come to 7% state sales tax on the purchase price, up to $88 in two capped local taxes, an $11 title fee, a $26.50 annual registration fee, and a county wheel tax that runs anywhere from about $10 to $80 a year. The real number on your bill depends on your county, your trade-in, and whether you drive an electric or hybrid vehicle. Here is how each piece works.
Sales Tax on the Purchase Price
Tennessee charges 7% state sales tax on the full price of a vehicle. On a $20,000 car, that is $1,400. The rate is the same whether you buy from a dealer or a private seller, because the tax is triggered any time the title changes hands.1TN.gov. County Clerk Sales and Use Tax Guide for Automobile and Boats
A trade-in shrinks the taxable amount. If you trade a vehicle worth $11,000 toward a $20,000 purchase, you owe 7% on the $9,000 difference, so the state sales tax drops to $630.1TN.gov. County Clerk Sales and Use Tax Guide for Automobile and Boats
The Two Capped Add-On Taxes
Two smaller taxes sit on top of the 7%, and both are capped, so no matter how expensive the car is they add at most $88 combined.
The local option sales tax applies only to the first $1,600 of the price. County and city rates vary but cannot exceed 2.75%, which puts the ceiling at $44.1TN.gov. County Clerk Sales and Use Tax Guide for Automobile and Boats
The state single article tax of 2.75% applies to the slice of the price between $1,600.01 and $3,200. Nothing above $3,200 is taxed under this rule, so the maximum here is also $44.2TN.gov. Single Article Special Tax Rates
Title and Registration Fees
Every vehicle titled in Tennessee pays a state title fee of $11, though some county clerks tack on a small processing charge of their own.3Tennessee Department of Revenue. LIEN-10 – Fee to Note a Lien If the car is financed, add another $11 state fee to record the lender’s lien on the title, bringing the state-level title cost on a financed vehicle to about $22 before any county fees.4TN.gov. Change in State Fee for Notation of Liens
The standard annual registration fee for a passenger vehicle is $26.50.5Tennessee Department of Revenue. VR-4 – Registration Fees Expect a few dollars more in postage when plates or decals are mailed, plus whatever small processing fee your county clerk charges.
Extra Charges for Electric and Hybrid Vehicles
Tennessee adds an annual surcharge to EV and hybrid registrations to make up for the gas tax those vehicles don’t pay at the pump. For registrations through December 31, 2026:
- All-electric vehicles: $200 per year on top of the $26.50 registration fee
- Hybrid and plug-in hybrid vehicles: $100 per year on top of the $26.50 registration fee
Those surcharges are set by statute and are scheduled to adjust in future years.6Tennessee Department of Revenue. VR-5 – Registration Fees for Hybrid or Electric Vehicles
County Wheel Tax
Most Tennessee counties charge an annual motor vehicle tax commonly called the wheel tax. It is a flat yearly fee collected with your registration renewal, and it funds local roads, schools, or general county operations. The amount depends entirely on where you live.
The range is wide. Shelby County charges $50 for a privately owned passenger vehicle; Cheatham County charges $80.7Shelby County, TN – Official Website. Privately Owned Vehicles Some smaller counties charge as little as $10 or $25. In some counties, including Shelby, the wheel tax is higher for leased or business-owned vehicles than for personally owned ones. Your county clerk’s office can confirm the exact amount.
Situational Fees
Gift Transfers
When a vehicle is genuinely gifted, no sales tax is owed. The recipient signs a gift affidavit at the county clerk’s office certifying that no money changed hands. This works for family and non-family transfers alike, as long as it is a true gift rather than a disguised sale.8Tennessee Department of Revenue. GI-10 – No Sales Tax on a Gifted Vehicle
Plate Transfers, Specialty Plates, and Temporary Tags
Moving an existing Tennessee plate to a newly purchased vehicle costs a plate transfer fee set by your county, so check with your local clerk before assuming a number. Personalized specialty plates cost $70 per year for the combined plate and personalization fee, plus any county fees.9Tennessee Department of Revenue. PSP-6 – Fee for Personalized Specialty Plate A temporary tag, if you need to drive the vehicle before registration is complete, costs $10 from the county clerk.10Tennessee Department of Revenue. VTR-29 – Temporary Tag Fee
Dealer Documentation Fees
Tennessee does not cap the documentation fee a dealership charges for processing paperwork. The amount varies widely by dealer, and these fees are negotiable even when printed on the buyer’s order. Ask for an itemized list of fees before signing.
Emissions Testing
Tennessee does not require emissions testing or safety inspections for registration. Davidson County was the last to require emissions testing and ended its program in February 2022.11Nashville.gov. Davidson County Vehicle Inspection Program That is one less fee to budget for.
Buying Out of State or Moving In
If you buy a car in another state and bring it to Tennessee, you owe Tennessee’s full sales and use tax, but you get credit for whatever sales or use tax you already paid to the other state. Pay 5% in the other state, and Tennessee charges you only the difference. If the other state’s rate was higher, you owe nothing more.12TN.gov. Credit for Sales or Use Tax Paid in Another State
New residents have 30 days to register a vehicle with their county clerk.13Tennessee Department of Revenue.