North Carolina Highway Use Tax: 3% on Vehicle Purchases

In North Carolina the tax on a vehicle purchase is called the highway use tax (HUT). It is paid when the title is issued, and the way it is calculated depends on whether you bought from a dealer or from a private seller.

This guide sets out the three rates on the NCDMV's registration requirements form, a worked example for each, the cap that applies to vehicles from out of state and military registrations, and the fees due at titling, using NCDMV documents and Article 5A of N.C. General Statutes Chapter 105, read on 29 October 2026.

The Three Highway Use Tax Rules

NCDMV form MVR-106 (Requirements for Obtaining North Carolina Registration, revision 04/26) lists the highway use tax as follows:

A casual sale is a purchase from someone who is not a dealer. The tax is based on the vehicle's computer value rather than on what you paid. Under G.S. 105-187.3(b), the market value of a vehicle is presumed to be the value in a schedule of values adopted by the NCDMV Commissioner, and that schedule may not exceed wholesale values in a recognized automotive reference manual.

Worked Examples (our illustration)

These are our arithmetic on the form's rules, not an official calculation; NCDMV computes the actual amount from its records.

Caps, Exemptions and Credit Under the Statute

The form summarises the rates; the statute (G.S. 105-187.3 to 105-187.7) adds rules the form does not list:

• Rate and commercial/RV cap: the rate is three percent, with a maximum tax of $2,000 for each certificate of title issued for a Class A or Class B commercial motor vehicle and for each certificate of title issued for a recreational vehicle.
• Out-of-state cap: the $250 maximum applies when the vehicle has been titled in your name in another state for at least 90 days before you apply for a North Carolina title.
• Credit for tax paid elsewhere: if you paid a sales, excise or substantially equivalent tax to another jurisdiction within the 90 days before applying, you get a credit against the North Carolina tax for the amount paid.
• Full exemptions: no tax applies to transfers such as by will or intestacy, a gift between spouses, a parent and child or a stepparent and stepchild, a distribution of property on separation or divorce, and a transfer to a revocable trust whose sole beneficiary is the owner. Most of these exemptions do not apply to a vehicle that is titled in another state at the time of the transfer.
• Partial exemption: a maximum tax of $40 applies to certain transfers, for example to a secured party with a perfected security interest.
• Service contracts: the sales price of a service contract is not taxed if it is separately stated on the bill of sale.
• Leases and rentals: a retailer may instead elect to pay tax on gross receipts of a lease or rental: 3% for a long-term lease or rental, 8% for a short-term one and 5% for a vehicle subscription.

The statute text was read from a copy of Article 5A published by a county government, because the General Assembly website returned an error; check the current text on ncleg.gov before relying on a borderline case.

Fees and Property Tax at Titling

• Certificate of title: $66.75, per the form.
• Plate fee, private passenger vehicles: $46.25.
• Property tax: the form says that, effective September 2013, property taxes are due at the time of license plate renewals and issuances.
• Insurance: the form also lists financial responsibility requirements for registration, in minimum amounts of $30,000/$60,000/$25,000.

Military Personnel

NCDMV's military services page says military personnel, residents and non-residents, registering a vehicle in North Carolina are not exempt from the highway-use tax. For a vehicle purchased by military personnel with military registration the tax is 3 percent of purchase price not to exceed $250; vehicles purchased overseas are not exempt from taxes either.

Official Sources

• NCDMV: Form MVR-106, Requirements for Obtaining North Carolina Registration (Rev. 04/26)
• NCDMV: Services for Military Personnel
• N.C. General Assembly: Chapter 105, Article 5A, Highway Use Tax