Duty rate for new cars
The duty rate for new cars in the United States varies depending on the type of vehicle, its value, and the state where it is purchased. Here are some general guidelines:
Federal Excise Tax (FET): The federal government imposes a 10% excise tax on the sale of new cars, which is included in the vehicle's purchase price.
State Sales Tax: In addition to the federal excise tax, most states impose a sales tax on the purchase of new cars. The state sales tax rate varies by state, ranging from 0% to 10%. The average state sales tax rate is around 5%.
Customs Duty: If a new car is imported from another country, it may be subject to a customs duty, which is a tax imposed by the U.S. government on imported goods. The customs duty rate varies depending on the type of vehicle and its country of origin. For example:
- Cars imported from Japan: 2.5% to 25% duty rate
- Cars imported from Germany: 2.5% to 10% duty rate
- Cars imported from South Korea: 2.5% to 10% duty rate
Other Taxes and Fees: In addition to the federal excise tax, state sales tax, and customs duty, there may be other taxes and fees associated with purchasing a new car, such as:
- Title and registration fees: These fees vary by state and are typically around $100 to $500.
- License plate fees: These fees vary by state and are typically around $20 to $100.
- Documentation fees: These fees vary by dealer and are typically around $100 to $500.
- Destination fees: These fees vary by manufacturer and are typically around $500 to $1,000.
Example: Let's say you purchase a new car with a sticker price of $30,000. Here's an estimate of the taxes and fees you might pay:
- Federal excise tax: 10% of $30,000 = $3,000
- State sales tax: 5% of $30,000 = $1,500
- Customs duty (if applicable): 2.5% of $30,000 = $750
- Title and registration fees: $200
- License plate fees: $50
- Documentation fees: $200
- Destination fees: $500
Total taxes and fees: $6,400
The total cost of the car would be: $30,000 (sticker price) + $6,400 (taxes and fees) = $36,400.