The Indiana motor vehicle excise tax is an annual tax most vehicle owners pay as part of registration, replacing the local personal property tax that would otherwise apply.1Justia Law. Indiana Code 6-6-5 – Motor Vehicle Excise Tax What you owe depends on two things: the vehicle’s original retail price when new, and how old it is. A brand-new car priced above $42,500 owes $532 in its first year. A ten-year-old economy car might owe $12.2Bureau of Motor Vehicles. Excise Tax Information You cannot register or renew without paying it.
What Determines Your Bill
Indiana sorts passenger vehicles into seventeen classes, Class I through Class XVII, based on the manufacturer’s original retail price when the vehicle was new.2Bureau of Motor Vehicles. Excise Tax Information That is the base sticker price before dealer markups or options. Your class is set for the life of the vehicle. Depreciation, resale price, accident damage, and modifications have no effect.
Class I covers vehicles under $1,500. Class XVII covers everything $42,500 and over. The brackets in between are narrow enough that most mainstream cars sit in Classes VIII through XIV. You can find the original retail price on the window sticker or through valuation databases recognized by the Indiana Department of Revenue.
Once your class is fixed, a declining schedule reduces the tax each year. Age is calculated by subtracting the model year from the calendar year the registration is due. The drop is steep in the first few years and then flattens. A Class XIII vehicle (original price $22,000 to $24,999) owes $300 at Age 0, $184 at Age 3, $96 at Age 6, and $30 from Age 9 forward. A top-bracket Class XVII vehicle starts at $532 and settles at $50 by Age 9. Lower-class vehicles bottom out at $12.2Bureau of Motor Vehicles. Excise Tax Information
The BMV publishes the complete table covering all seventeen classes and every age bracket on its website. Once your vehicle hits Age 9, the amount stays the same every year after.
Extra Fees for Electric and Hybrid Vehicles
If you own an electric or hybrid vehicle, you pay a supplemental fee on top of the standard excise tax. The current amounts are $242 per year for fully electric vehicles and $81 per year for hybrids.3Bureau of Motor Vehicles. BMV Fee Chart These fees are indexed to the consumer price index and adjusted every five years, and the money goes into the state’s local road and bridge matching grant fund.
The supplemental fee can be larger than the excise tax itself. A five-year-old Class XIII electric car owes $121 in excise tax plus $242 in supplemental fees, so the EV surcharge is roughly two-thirds of the total.
County Wheel Tax and Local Surtax
Many Indiana counties and municipalities add their own wheel tax or excise surtax to registration. These are separate charges, not part of the state excise tax, and they vary by location from a few dollars to $40 or more. Not every county imposes one. The BMV maintains a current list by county, and the local amount shows up as a line item at renewal.
Credits You Can Claim
If you sell, total, or otherwise dispose of a vehicle partway through a registration year, you are entitled to a pro-rated credit on the excise tax you already paid. The credit equals the tax paid, reduced by one-twelfth for each full or partial month between the start of your registration year and the date you got rid of the vehicle.4Indiana General Assembly. Indiana Code 6-6-5-7.2 – Application of Section Proration of Tax Bring the BMV proof of the sale or loss, such as a bill of sale or insurance documentation.
The credit applies first to the excise tax on a replacement vehicle. If you don’t use it within 90 days and at least $4 remains, the BMV issues a refund minus a $3 processing fee.4Indiana General Assembly. Indiana Code 6-6-5-7.2 – Application of Section Proration of Tax Rolling the credit into a replacement registration is faster and avoids the fee.
Certain veterans qualify for a separate credit under Indiana Code 6-6-5-5.2. The amount is the lesser of $70 or the full excise tax owed, so it can wipe out the bill on an older, lower-class vehicle but will only partially cover a newer, expensive one. Eligibility generally requires a service-connected disability shown by a pension certificate or award of compensation from the U.S. Department of Veterans Affairs, or a certificate of eligibility from the Indiana Department of Veterans’ Affairs.5Indiana General Assembly. Indiana Code 6-6-5-5.2 – Credit for Certain Veterans Who Are Not Eligible for a Property Tax Deduction Present documentation at registration. Claiming afterward means waiting on a refund.
Deducting the Tax on Your Federal Return
Indiana’s excise tax is based on the vehicle’s original retail price, which makes it an ad valorem tax. If you itemize, you can deduct it as a personal property tax on Schedule A of your federal return.6Internal Revenue Service. Schedule A – Itemized Deductions Publication 4012 The IRS allows the deduction because the tax is calculated from the value of the property.
It falls under the state and local tax (SALT) cap, which for 2025 was $40,000 for most filers and $20,000 if married filing separately.7Internal Revenue Service. How to Update Withholding to Account for Tax Law Changes for 2025 That ceiling covers your state income taxes, property taxes, and vehicle excise tax combined. Keep the registration receipt as proof.
How and When to Pay
The excise tax is due each year when you renew your vehicle registration. The expiration date is printed on your current registration card and decal. The BMV usually sends a renewal notice, but the duty to renew on time is yours whether a notice arrives or not.8Bureau of Motor Vehicles. Online Services and BMV Connect Kiosks
You have several options:
- Online through the myBMV portal.
- BMV Connect self-service kiosks, available 24 hours a day, which print your new registration and decal on the spot.
- In person at any BMV branch, which accepts cash, checks, and credit cards.
- By mail, if you send payment several weeks before the expiration date.
What Happens If You Pay Late or Not at All
Driving on an expired registration is a Class C infraction, carrying a judgment of up to $500 plus court costs.9Indiana General Assembly. Indiana Code 9-18.1-11-5 – Delinquent Registration Administrative Penalty Violation10Justia Law. Indiana Code 34-28-5 – Infraction and Ordinance Violation Enforcement The $500 figure is a ceiling, not an automatic amount; courts have discretion, and many expired-registration tickets end up smaller. The BMV also collects a $15 administrative penalty when you finally renew a lapsed registration.
If the BMV discovers your vehicle was registered without the excise tax ever being paid, the registration is void. The bureau takes possession of the plates and registration certificate until you pay the delinquent taxes plus an additional $10 fee.1Justia Law. Indiana Code 6-6-5 – Motor Vehicle Excise Tax
New Residents
If you move to Indiana from another state, you have 60 days to apply for an Indiana title on every vehicle you own.11Bureau of Motor Vehicles. New Indiana Residents Titling triggers the excise tax, so you pay it as part of your first Indiana registration. Your vehicle is classified by original retail price and aged by model year under the same rules that apply to every other Indiana vehicle. Remaining registration value from your previous state does not carry over.