Vermont Used Car Sales Tax: 6% on Price or J.D. Power Value, Credits and Exemptions

Vermont charges a 6% Purchase and Use Tax on a used car, figured on the price you paid or the J.D. Power clean trade-in value, whichever is higher, and you pay it when you register or title the car. As of Oct 20, 2026, ordinary cars, motorcycles, motor homes and lighter trucks have no cap, and heavier trucks top out at $2,486. Paying less than book only works with a dealer appraisal, and a sold car only counts as a credit inside a three-month window.

I read the Vermont DMV's vehicle taxation and credits pages, its VD-119i registration instructions (September 2025 edition), Dealer Bulletin 25-6, and the tax statutes at 32 V.S.A. 8903 and 8911 on Oct 20, 2026. Two of those disagree on one deadline, which I'll flag below. If you're just after the basic title steps, our Vermont private-sale title transfer guide covers them; this page is about the tax math.

How the 6% gets figured

The DMV uses the higher of your purchase price and the J.D. Power clean trade-in value. Say you pay a neighbor $4,000 for a car J.D. Power lists at $7,000 clean trade-in. You owe 6% of $7,000, or $420, instead of $240. On a dealer sale, the documentation fee is part of the taxable price too. A lease buyout is taxed on the residual value.

If you register a car that was already registered out of state to you or your spouse, the tax runs on the J.D. Power value. VD-119i says you may get credit if it was registered to you in a place that charges a sales or use tax, and statute 8911 lists that exemption too.

Lowering the value with an appraisal

If the car is worth less than book because it's rusty or tired, the only accepted route is a Dealer Appraisal, form VD-012. It has to come from a licensed dealer or an appraiser licensed with the Department of Financial Regulation. The taxable cost becomes the appraisal or your price, whichever is greater, so a low appraisal can't take you below what you paid. Two other limits:

• An appraisal saying the car is not inspectable or not roadworthy won't be accepted.
• VD-119i says "DMV does not accept any values determined by online research," so a printout from a pricing website won't do it.

The deadline conflict: the credits page says an appraisal submitted after registration must have been done within 90 days of the registration date to count for a refund. VD-119i says a post-registration appraisal "must be received within 30 days." I'd plan on 30 and treat 90 as the outer limit, because missing the shorter deadline costs you the refund.

Credit for the car you sold

Sell a car registered to you within three months before or after buying another, and you can get a credit or refund. Only one sold vehicle counts against one replacement. The odd part: the credit is based on the J.D. Power clean trade-in value of the car you sold, "for the same make, type, model, and year," not the price you got. If you dump an old car cheap, you may still get credit for its book value. You'll need paperwork for both cars, such as a title, a bill of sale with odometer statement (VD-005), or a registration. Guard and military members get the window extended day for day while deployed, plus 60 days. Refund applications are due within one year.

Exemptions that actually come up

Claim them on form VT-014. Statute 8911 lists these:

• Gifts to a spouse, mother, father, child, sibling, grandparent or grandchild, if the car was registered or titled in Vermont in the original donor's name. VD-119i's examples skip siblings, but the statute includes them.
• Transfers to a former spouse within a year of the divorce.
• Tax paid to another state: you pay Vermont only the difference, with proof of payment. VD-119i says a retail installment agreement isn't acceptable proof.
• Salvage certificates and manufacturer buyback titles.

The Florida problem: the DMV's FAQ says some states, Florida included, collect "Vermont" tax at your home-state rate, and "that tax money is not transferred to Vermont." If you later sell your old car, Vermont won't refund any of it; you'd have to ask the state that collected it. If the car comes with a salvage history, read our Vermont salvage and rebuilt title rules first and check the VIN on NMVTIS.

Trucks and the $2,486 cap

Statute 8903 sets 6% on pleasure cars, motorcycles, motor homes and vehicles up to 10,099 pounds. Everything else pays 6% or $2,486, whichever is smaller, and short-term rentals pay 9%. Dealer Bulletin 25-6 says the DMV had been applying that cap using registered weight, and starting Jan. 1, 2026 it uses empty weight only. If you're buying a heavy pickup, ask which weight the dealer used.

Lawmakers did talk about this tax in 2026. VTDigger reported in March that the money splits two-thirds to the Transportation Fund and one-third to the Education Fund, and the governor proposed shifting $10 million a year to transportation. That's about where the money goes, though. The 6% rate was still on the DMV page when I checked. If you are buying just across the border, our New Hampshire used car sales tax guide covers the other side of the border, and the national used car sales tax overview compares states.

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Sources

• Vermont DMV: Vehicle taxation and Credits and refunds
• Vermont DMV: VD-119i instructions (PDF) and Dealer Bulletin 25-6
• 32 V.S.A. 8903 and 8911, Vermont General Assembly (read Oct. 20, 2026)
• VTDigger: Lawmakers weigh changes to Vermont's vehicle purchase tax (March 17, 2026)