Slide Show | May 2006

TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

Turns out all 50 states are not equal when it comes to paying taxes on a new car purchase. Kiplinger's asked Vincentric, the Bloomfield Hills Mich.-based automotive research firm, to add up taxes and fees over five years for buying a new 2006 Toyota Camry, costing $20,375. That's a fairly typical car purchase in the U.S. But the numbers show surprising disparities. (see State Fees on That New Car: Here's What You'll Pay). Here are the ten states that are easiest on the motorists' wallet, according to Vincentric, along with a national average for all car buyers.

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

1. OREGON

Taxes and Fees, 5-year total: $220
National Average: $1,429
Oregonians pay no sales tax when they purchase a new vehicle in-state, but fees total $112 in year one. Residents pay just $54 every other year after that.

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1. OREGON

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

2. ALASKA

Taxes and Fees, 5-year total: $315
National Average: $1,429
The largest state in the Union takes it easy on car buyers, with no sales tax and a $100 registration fee every two years. But communities levy their own taxes.

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2. ALASKA

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

3. ALABAMA

Taxes and Fees, 5-year total: $508
National Average: $1,429
A low, 2% sales tax and yearly registration fee of $23 keeps Alabamians' auto outlays low. But some counties also charge fees.

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3. ALABAMA

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

4. DELAWARE

Taxes and Fees, 5-year total: $695
National Average: $1,429
Delaware's 2.75% sales tax plus $30-a-year fees make the First State a tax-thrifty place for vehicle owners.

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4. DELAWARE

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

5. VIRGINIA

Taxes and Fees, 5-year total: $725
National Average: $1,429
Grass-roots opposition to Virginia's car tax led to a reduction of the one-year levy to 3% of the value of the vehicle. Registration is $30 a year, or $35 for vehicles heavier than 4,000 pounds.

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5. VIRGINIA

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

6. NORTH CAROLINA

Taxes and Fees, 5-year total: $748
National Average: $1,429
The Tar Heel State charges a modest 3% sales tax on new car purchases and $28 a year to renew registrations.

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6. NORTH CAROLINA

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

7. SOUTH DAKOTA

Taxes and Fees, 5-year total: $793
National Average: $1,429
Besides the 3% sales tax, Bad Lands denizens pay a $42 registration fee for most vehicles. The fee varies by weight.

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7. SOUTH DAKOTA

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

8. WYOMING

Taxes and Fees, 5-year total: $841
National Average: $1,429
A 4% sales tax and $15 registration fee each year keep taxes and fees moderate. However, vehicle registration is handled by counties, which may charge additional taxes.

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8. WYOMING

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

9. NEW MEXICO

Taxes and Fees, 5-year total: $851
National Average: $1,429
The registration fees for New Mexicans are based on the weight and model year. For most cars, they're $60 in year one and $56 a year after that. You also pay a 3% sales tax when you purchase a vehicle.

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9. NEW MEXICO

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TEN TAX-FRIENDLIEST STATES FOR BUYING A NEW CAR

10. LOUISIANA

Taxes and Fees, 5-year total: $870
National Average: $1,429
Down in the Bayou State, first-year fees are $37 plus a 4% sales tax. Reregistering a vehicle costs $18.50 a year.

Compiled by Mark Solheim and Beth Rosenfeld

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10. LOUISIANA

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