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Buying a car out of state (Tennessee buyers)

As of Oct. 16, 2026

Short answer: If you live in Tennessee, you pay Tennessee sales tax on a car you buy in another state, at your county clerk when you title and register it. If the other state's dealer charged their own sales tax, Tennessee gives credit for it and you pay only the difference. Kentucky dealers usually charge Tennessee buyers no Kentucky sales tax, so the whole Tennessee amount is due at the clerk: 7% state tax, plus local tax on the first $1,600 and the 2.75% state single-article tax (together at most $88). Register it before the temporary tag expires.

Best move before you buy across the state line

Before you sign out of state, ask the dealer in writing which of three things will happen: they charge their state's tax, they collect Tennessee tax for you, or they charge none. Then budget the Tennessee amount from the calculator, keep the bill of sale that shows any tax paid, and go to your county clerk before the temporary tag runs out.

The math:

  • Gallatin example, $30,000 car + $699 doc fee from a Kentucky dealer: 7% × $30,699 = $2,148.93 + local 2.75% × $1,600 = $44 + single-article 2.75% × $1,600 = $44 → about $2,236.93 due at the Sumner County Clerk (before title, registration and wheel tax).
  • Credit example from the TN manual: Tennessee tax figured at $1,550, the other state's tax paid was $1,500 → $50 due in Tennessee.
  • Trade-in: Tennessee taxes the price minus the trade credit on the invoice. For a car bought out of state and brought in, the trade must have been registered in Tennessee in your name to count.

Sources: TN DOR VTR-37: Sales tax on a vehicle purchased out of state · TN Dept. of Revenue: County Clerk Sales and Use Tax Manual for Automobiles & Boats · KRS 139.470(19)(b): Kentucky sales tax exemption for motor vehicles sold to certain nonresidents · TN DOR VTR-47: New car purchased out of state, title/registration procedure

A best fit for the situation described, not financial advice or a buy/sell recommendation. Partner links never change a pick.

Your roadmap

  1. Get the out-the-door quote in writing and ask: “Will you charge your state's sales tax, collect Tennessee tax, or none?”
  2. Check the bill of sale shows any tax collected, the doc fee, and the trade-in by year, make and VIN.
  3. Drive home on the dealer's temporary tag and don't let it expire (TN DOR VTR-47). If the car will be driven in Tennessee, registration is required right away (VR-18).
  4. Bring to your county clerk: the Manufacturer's Statement of Origin and invoice (new) or the signed title with odometer disclosure (used), the bill of sale, ID, proof of residency, and your current registration if you're moving a plate.
  5. Pay the Tennessee tax due (minus any credit) plus title, registration and county wheel tax.
  6. From Jan. 1, 2027: initial registrations need proof of U.S. citizenship or lawful presence (Tenn. Code Ann. § 55-4-144, TN DOR).

Your situation, what you pay

SituationWhat happens with tax
I bought (or will buy) from a Kentucky dealerKentucky: KRS 139.470(19)(b) exempts a Kentucky dealer's sale from Kentucky sales tax when the nonresident registers the car in a state that lets Kentucky residents buy or remove cars without that state's tax. Tennessee does (its 3-day removal affidavit). So a Kentucky dealer usually charges no sales tax, and you pay the full Tennessee amount at your county clerk. Get the dealer's answer in writing.
Another state's dealer charged that state's sales taxOther state's tax: Tennessee credits sales or use tax that was legally imposed by the other state. If that state's tax is lower, you pay the difference, plus the state single-article tax if it wasn't collected (TN DOR VTR-37). Bring the bill of sale that shows the tax.
The out-of-state dealer collected Tennessee tax for meDealer collected Tennessee tax: some out-of-state dealers are registered to collect Tennessee tax and send it to Tennessee (VTR-37). Enter what they collected as tax already paid; the bill of sale must show it.
I bought from a private seller in another statePrivate seller: in Tennessee, sales between people who aren't dealers are still taxable when the title transfers, unless it's between spouses or certain close relatives (TN County Clerk manual). No doc fee or dealer trade-in credit usually applies.
I bought it out of state, then moved to Tennessee before titling itBought, then moved before titling: you pay the purchase state's tax; if Tennessee's tax is higher, you pay the difference to Tennessee (TN DOR VTR-38). Enter the other state's tax as already paid.
I'm moving to Tennessee with a car I already ownMoving to Tennessee with your own car: a bona fide change of residence lets you bring your personal vehicle in without Tennessee use tax (TN County Clerk manual). You still title and register it at your county clerk. This doesn't apply to business vehicles, or to Tennesseans returning from military duty or school.

Sources: TN DOR VTR-37: Sales tax on a vehicle purchased out of state · TN DOR VTR-38: Vehicle purchased out of state and moved to TN before titling · TN Dept. of Revenue: County Clerk Sales and Use Tax Manual for Automobiles & Boats · KRS 139.470(19)(b): Kentucky sales tax exemption for motor vehicles sold to certain nonresidents.

Show me the details

How Tennessee figures tax on a car

  • 7% state sales tax on the full taxable price (TN DOR VTR-34).
  • Local tax (up to 2.75%, by county/city) applies only to the first $1,600 of a single article, so at most $44. A few places use a lower base (Hamblen $300, Hancock $375) per the TN local rate file.
  • State single-article tax 2.75% on the part from $1,600.01 to $3,200, so at most $44.
  • Taxable price includes dealer-installed accessories and doc/prep fees; separately stated title fees, GAP and finance charges are not taxed. Manufacturer rebates do not lower the taxable price; a dealer's own discount does.
  • Service contracts / extended warranties bought with an out-of-state car are subject to Tennessee use tax when you bring the car home, at the full state + local rate on the whole price (no single-article cap).
  • Trade-ins lower the taxable price only if the dealer gives credit on the invoice. For a vehicle bought outside Tennessee and brought in, the trade must have been registered in Tennessee in your name.

Source: TN Dept. of Revenue: County Clerk Sales and Use Tax Manual for Automobiles & Boats (June 2025); TN DOR VTR-34: Sales tax on a vehicle purchase (7% + 2.75% single article; county wheel tax and local tax vary).

Kentucky and Tennessee, both directions

  • Tennessee resident buying in Kentucky: KRS 139.470(19)(b) exempts sales to nonresidents who register in a state that lets Kentucky residents buy without that state's tax or remove the vehicle within a set period. Tennessee's three-day removal rule fits that test, so Kentucky dealers generally don't charge Kentucky sales tax to Tennessee buyers. Kentucky dealers must still collect Kentucky tax on nonresident sales that are not exempt (103 KAR 28:150).
  • Kentucky (or any non-Tennessee) resident buying in Tennessee: no Tennessee sales tax if the vehicle is removed to another state within three days and the dealer and buyer complete the Three-Day Affidavit, or if the dealer delivers it outside Tennessee with a Certificate of Interstate Delivery. Kentucky residents then deal with Kentucky's 6% motor vehicle usage tax at their own county clerk.
  • Fort Campbell: Tennessee exempts car sales to certain active-duty members stationed on orders in Tennessee, and “stationed in Tennessee” includes Fort Campbell, Kentucky. The car must be titled and registered in Tennessee in the member's name (alone or with a spouse or lineal relative), with orders shown to the seller or clerk (Tenn. Code Ann. § 67-6-303).

Sources: KRS 139.470(19)(b): Kentucky sales tax exemption for motor vehicles sold to certain nonresidents · 103 KAR 28:150: Kentucky dealer sales of motor vehicles to nonresidents · TN Dept. of Revenue: County Clerk Sales and Use Tax Manual for Automobiles & Boats · Kentucky DOR: Motor Vehicle Usage Tax clerk guide (6% MVUT; KRS 138.460(6)(a) credit).

Buying in Georgia, Alabama, or another state?

We haven't verified each neighboring state's dealer rules yet, so we don't guess. What Tennessee says applies everywhere: the dealer either charges their state's tax, collects Tennessee tax for you, or charges none. Tennessee credits a legally imposed sales or use tax paid to the other state, and charges the rest at your county clerk. Credit is not given for another state's property taxes or other fees.

Source: TN DOR VTR-37: Sales tax on a vehicle purchased out of state · TN Dept. of Revenue: County Clerk Sales and Use Tax Manual for Automobiles & Boats.

Limits of this page

  • Estimates only. Your county clerk applies the law to your paperwork and decides what is due.
  • Title, registration, plate and county wheel tax amounts are not included.
  • Leases, business vehicles, boats, trailers and gifts have their own rules (see the TN manual).
  • We have not checked dealer tax-collection practices in states other than Kentucky.

Why trust this: VaultRubric's owner spent years in dealership sales and management. Every rule here is cited to the state; every number is the state's or yours.

Not tax or legal advice. We republish Tennessee Department of Revenue and Kentucky rules with dates and do math on the numbers you type. Your county clerk decides the final amount.

Sources & as-of dates

FAQ

Do I pay sales tax if I buy a car in another state and live in Tennessee?

Yes. Tennessee tax is due when you title and register the car at your county clerk. If the other state's dealer charged their own sales tax, Tennessee gives credit for that legally imposed tax and you pay the difference, plus the state single-article tax if it wasn't collected (TN DOR VTR-37).

Do Kentucky dealers charge sales tax to Tennessee residents?

Usually not. KRS 139.470(19)(b) exempts sales to nonresidents who register in a state that lets Kentucky residents buy or remove vehicles without that state's tax, and Tennessee's three-day removal rule does. You then pay the full Tennessee tax at your county clerk. Confirm with the dealer in writing.

How much is Tennessee sales tax on a car?

7% state tax on the taxable price, plus local tax of up to 2.75% on the first $1,600 and a 2.75% state single-article tax on the portion from $1,600.01 to $3,200. Local plus single-article adds at most $88. County wheel tax and registration fees are extra.

Does my trade-in lower the tax on a car bought out of state?

Only if the dealer gives trade-in credit on the invoice and, for a vehicle brought into Tennessee, the traded-in vehicle was registered in Tennessee in your name (TN County Clerk Sales and Use Tax Manual, June 2025).

How long do I have to register a car bought out of state in Tennessee?

Apply for Tennessee title and registration before the out-of-state temporary tag expires (VTR-47). If the car will be driven in Tennessee, registration is required immediately (VR-18).

I'm moving to Tennessee. Do I pay sales tax on my car?

No Tennessee use tax is due on a personal vehicle brought in with a bona fide change of residence. You still title and register it at your county clerk.

Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.