Yes, but it's called use tax, and the buyer pays it, not the seller. When you buy a car from a private party in California, you pay use tax to DMV when you register the vehicle. The rate is the same as the sales tax rate for the address where you register it, and it applies to the full purchase price. The private seller doesn't collect tax. Exemptions exist for genuine gifts and for transfers between certain family members.
Educational information only. This article is not legal, tax or financial advice. Confirm your situation with CDTFA or a tax professional.
In this article
How it works
| Private-party purchase | |
|---|---|
| Who pays | The buyer |
| Paid to | DMV, when you transfer the registration (or CDTFA directly if you don't register) |
| Rate | The sales and use tax rate for the address where you register the car |
| Due | At registration. If you pay CDTFA directly, by the last day of the month after the month of purchase |
| Seller's role | No tax to collect. File the Notice of Transfer and Release of Liability within 5 days. See How many days to notify DMV after selling a car? |
Look up your rate with CDTFA's rate finder (Opens in new window). The statewide base rate is 7.25%, and local district taxes add to it.
What's taxed
CDTFA says "the total purchase price of your vehicle is subject to tax." That includes cash, any loan or debt you take over, and the fair market value of anything you trade, including services.
Write the true price on the paperwork. Understating the price on a bill of sale to cut the tax isn't a loophole; DMV and CDTFA can question prices that look far below market.
When no tax is due
| Exemption | Key condition |
|---|---|
| Gift | Nothing given in return: no cash, trade, services or assumed debt. You need a signed statement from the former owner |
| Family transfer | From a parent, grandparent, child, grandchild, spouse or registered domestic partner, or a sibling if both are minors. Stepparents and stepchildren don't qualify unless there's a legal adoption |
| Inheritance and other involuntary transfers | Court order, divorce property settlement, estate, repossession, with supporting documents |
| Bought only to take out of state | Private-party purchases where the only California use is driving it out, and it's never registered here |
See How to avoid sales tax on a used car in California (legally).
Private sale vs dealer sale
| Private party | California dealer | |
|---|---|---|
| What it's called | Use tax | Sales tax |
| Who collects | DMV, at registration | The dealer, on the contract |
| Trade-in reduces the tax? | No trade-in involved | No. California taxes the full selling price. See Does a trade-in reduce sales tax in California? |
| Doc fee | None | Taxable |
Frequently asked questions
Do you pay sales tax when buying a car from a private seller in California?
Yes. The buyer pays use tax to DMV at registration, at the rate for the buyer's address.
Does the seller pay sales tax on a private car sale?
No. The buyer pays. The seller's job is to give a smog certificate when one is required, sign over the title and file the release of liability.
Is a car from a family member taxed?
Not if it comes from a parent, grandparent, child, grandchild, spouse or registered domestic partner, or a sibling when both are minors.
Related questions
- What is California use tax on a vehicle?
- What taxes and fees do you pay on a used car in California?
- How to register a used car in California
- Back to the California Dealer License FAQ
Resources
- CDTFA: Tax guide for purchasers of vehicles (Opens in new window)
- CDTFA: Find a sales and use tax rate (Opens in new window)
- California DMV: Registration fees (Opens in new window)
Sources: CDTFA vehicle purchaser guide (Opens in new window) (use tax, rate basis, taxable price, exemptions) · CDTFA tax rates. Verified 2026-10-16.
This article is for educational purposes only and is not legal, tax or financial advice. Tax rules and rates change; confirm with CDTFA or a licensed tax professional.