Several of the states on the "no-state-income-tax list" are some of the top states for high sales or property taxes - especially Texas and Washington. Here's the big surprise. A number of states include inventory as part of their TPP tax. Montana is 21st in WalletHub's rankings of states with the lowest real-estate property taxes, but residents pay an average of just $85 in state vehicle property taxes. Delaware, known for having a business-friendly climate, has no state sales tax largely as a method of attracting shoppers from neighboring states like Pennsylvania, New Jersey, and Maryland, all of which have sales taxes.Over 40% of the state's revenues instead come from corporate taxes from the many out of state companies that choose to register in Delaware. Additionally, Oregon charges its dealers a vehicle privilege tax of .005% of the retail price of a new vehicle that has less than 7,500 miles on it; this tax is usually passed on to the buyer. But if you decide to drive the car home to Illinois, Indiana, or Minnesota, the dealer must charge you sales tax in Michigan. In some places, this jumps to as high as 7.5 percent. However, if you have the dealer or seller ship or deliver your car to a location outside the state, then no sales tax is due back to Michigan. Sales tax gets even more complicated for online sellers. So if you buy a Ford F-150, Chevy Tahoe, or Honda Civic in Michigan, but plan on titling and registering it in one of the sales tax-free states - such as Alaska, Delaware, Montana, New Hampshire, Oregon, or New Mexico – the state of Michigan exempts your vehicle from its sales tax. State and Local Auto Sales Tax Rates as of 2020. At least 15 states authorize local governments to impose their own taxes or fees and rental car companies add on charges for off-site rentals, airport fees, and insurance coverage. State property taxes on real estate and on cars turn out to vary widely -- and not necessarily in the ways that you'd expect. The easiest way to do so is to buy a car in a state with no sales taxes and register the car there. To save money when buying your next vehicle, consider buying it in a state that doesn't charge sales tax. States With No Sales Tax on Cars.   New Jersey phased out its estate tax ending in 2018. Bill Clinton's home state is a pretty deep shade of red these days, and it shows on the taxation front -- at least when it comes to state property taxes. The map below shows the states that have inventory taxes: Inventory taxes violate a number of principles of sound tax policy. Florida only collects sales tax in the amount that purchasers would pay in their home states. Buying your new car is a significant event and is one of the most expensive and longest-term purchases many people make. Residents of Alabama, the District of Columbia, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maryland, North Dakota, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington, and Wisconsin pay nothing at all in state vehicle property taxes. You pay a maximum of 6%, Florida's state sales tax rate, which saves money for you. The Beehive State is about as red as a state gets -- Utah hasn't gone to the Democrats in a presidential election since 1964, and recent elections have not been close. A sales tax is an amount of money state and local governments require sellers to collect when they sell goods or services. These states may also charge a tax on vehicles bought out of state or bought from dealers out of state. John has been writing about the auto business and investing for over 20 years, and for The Motley Fool since 2007. However, the state does permit local communities to assess their own local sales tax. In total, more than 40 states levy a charge on rental cars, either by imposing an additional excise tax, daily fee, or both. This tax policy means residents of New Hampshire, Delaware, Montana, Oregon, Alaska, and New Mexico, who find and buy their dream cars in Florida don't pay sales or use taxes in Florida. If you purchase a car in Oregon and then register it in CA then … Like Florida, Michigan exempts out-of-state car buyers from sales tax when their home state has no sales tax on cars. New Jersey As a general rule, if you live out of state, buy a car in Michigan, and take delivery there, you must pay sales tax in Michigan. Whether the transaction is through a dealer or a private individual, the buyer must fill out and submit Form DR-123, Affidavit for Partial Exemption of Motor Vehicle Sold for Licensing in Another State. 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