Whether you're buying a new or used car in West Virginia, there will be fees and sales tax owed to the state for the purchase and retitling of the vehicle. Normally a dealer will handle the calculation and itemize the tax amount on the sales contract. The dealer is responsible for completing the application for a new title and submitting it with any required attachments. West Virginia law also requires the parties to a private transaction to document and pay sales tax, if money changes hands.
West Virginia collects a 5 percent sales tax on all sales of new and used vehicles to be titled in the state. For transactions of less than $500, a flat $25 sales tax is payable. When you purchase a new car, the dealer will collect the sales tax and remit it to the West Virginia State Tax Department, using the Sales and Use Tax Return. Fees on the transaction are paid to the West Virginia Division of Motor Vehicles.
West Virginia's motor vehicle sales tax is distinct from the state's ordinary sales tax on tangible goods, which is 6 percent, as well as the tax on food, which stands at 3 percent as of 2015. The motor vehicle sales tax is payable whether a vehicle is purchased in West Virginia or out of state -- the trigger for the tax is the retitling of the vehicle to a West Virginia resident. This means if you're a non-resident who buys a car in West Virginia and then titles it in another state, you won't owe sales tax on the purchase.
When a dealer completes an application for a West Virginia title, she writes the purchase price on the form or includes an invoice with the application. Out-of-state purchases require the invoice with the application when you apply for the title. If you traded in a car, the dealer deducts the trade-in allowance from the sales price to calculate the net (taxable) purchase price.
Title applications for private purchases require a notarized bill of sale if the purchase price is less than half the NADA book value. Without a bill of sale, the Division of Motor Vehicles will assess tax on whatever the NADA value is. If the purchase price is more than half the NADA value, no bill of sale is required and sales tax is assessed on the purchase price. Whenever an invoice or bill of sale is submitted with a title application, the purchase prices on both documents must match. If a car is being gifted to another individual, business or charity, the division requires an Affidavit of Transfer of Ownership Without Consideration (DMV-5-TR). Without the affidavit, sales tax is due.
