Does insurance pay sales tax on a totaled car? Rules by state (2026)
Of the 51 jurisdictions Fairmark tracks (50 states and DC), 27 require a cash settlement for a total loss on your own policy to include sales tax (in Alaska and Oregon, which have no statewide sales tax, the rule covers fees and any local or vehicle tax), 4 (Florida, Hawaii, Illinois and Ohio) pay it once you buy a replacement, 2 (Missouri and Texas) do not require it, and 18 have no clear state rule. In 21 of the 27 jurisdictions that require sales tax, the settlement must also include transfer fees such as title and registration; Hawaii and Illinois reimburse title fees on proof of purchase.
Last reviewed from statutes, regulations and Department of Insurance publications.
Key findings
- Of the 51 jurisdictions Fairmark tracks (50 states and DC), 27 require a cash settlement for a total loss on your own policy to include sales tax (in Alaska and Oregon, which have no statewide sales tax, the rule covers fees and any local or vehicle tax), 4 (Florida, Hawaii, Illinois and Ohio) pay it once you buy a replacement, 2 (Missouri and Texas) do not require it, and 18 have no clear state rule.
- In 21 of the 27 jurisdictions that require sales tax, the settlement must also include transfer fees such as title and registration; Hawaii and Illinois reimburse title fees on proof of purchase.
- In Hawaii, Illinois and Ohio the insurer pays the tax back if you buy a replacement within 30 days and send proof within 33 days; it may also pay it up front. In Florida the insurer may wait until you buy a replacement and the tax is actually owed.
- Missouri does not require the tax but gives a credit instead: on a replacement bought within 180 days of the payment, you pay tax only on the price above the payout and deductible.
- On a claim against the at-fault driver's insurer, the same rule applies in Alaska, Arkansas, Hawaii, Maryland, Oregon, Utah and Vermont; it may also apply in Indiana, Kansas, Massachusetts, New York, Tennessee and Wyoming, but we could not confirm it.
Sales tax and fees on a total loss, by state
The first two columns are for a cash settlement on your own policy. The state rate is the state-level tax on buying a car; local taxes can add to it.
| State | Sales tax | Title and registration fees | At-fault driver's insurer | State rate on a car | Source |
|---|---|---|---|---|---|
| Alabama | Insurer must include it | Included | Not stated | 2% | Ala. Admin. Code r. 482-1-125-.08(1)(a)-(b) |
| Alaska | Local taxes included | Included | Included | 0% | 3 AAC 26.080(a)(1)(A)-(B) |
| Arizona | Insurer must include it | Included | Not stated | 5.6% | Ariz. Admin. Code R20-6-801(H)(1)(a)-(b) |
| Arkansas | Insurer must include it | Included | Included | 6.5% | Ark. Code Ann. § 23-89-211(a)-(d) |
| California | Insurer must include it | Included | Not stated | 7.25% | Cal. Code Regs. tit. 10, § 2695.8(b)(1) |
| Colorado | Insurer must include it | Included | Not stated | 2.9% | C.R.S. § 10-4-639(1) |
| Connecticut | No clear state rule | Not stated in the rule | Not stated | 6.35% | Source |
| Delaware | No clear state rule | Not stated in the rule | Not stated | 5.25% | Source |
| District of Columbia | No clear state rule | Not stated in the rule | Not stated | Varies | Source |
| Florida | Owed when you buy a replacement | Not stated in the rule | Not stated | 6% | Fla. Stat. s. 626.9743(5)(a)-(b) and (9) |
| Georgia | Insurer must include it | Included | Not stated | 7% | Ga. Comp. R. & Regs. r. 120-2-52-.06(a) |
| Hawaii | Owed when you buy a replacement | On proof of purchase | On proof of purchase | 4% | HRS s. 431:10C-312 |
| Idaho | No clear state rule | Not stated in the rule | Not stated | 6% | Source |
| Illinois | Owed when you buy a replacement | On proof of purchase | Not stated | 6.25% | 50 Ill. Adm. Code 919.80(c)(3)(A) |
| Indiana | Insurer must include it | Not stated in the rule | Unconfirmed | 7% | Indiana Department of Insurance Bulletin 82 (Feb. 25, 1994) |
| Iowa | Insurer must include it | Included | Not stated | 5% | Iowa Admin. Code r. 191-15.43(1)(a)(1)-(2) |
| Kansas | Insurer must include it | Included | Unconfirmed | 6.5% | K.A.R. 40-1-34(k)-(m) |
| Kentucky | Insurer must include it | Included | Not stated | 6% | 806 KAR 12:095 Section 7(1)(a)-(b) |
| Louisiana | No clear state rule | Not stated in the rule | Not stated | 5% | La. R.S. 22:1892(B)(5), (F)(2) |
| Maine | Insurer must include it | Not stated in the rule | Not stated | 5.5% | 24-A M.R.S. § 2907 |
| Maryland | Insurer must include it | Included | Included | 6.5% | COMAR 31.15.12.01, 31.15.12.04A(2), B(2) |
| Massachusetts | No clear state rule | Not stated in the rule | Unconfirmed | 6.25% | 211 CMR 133.05 |
| Michigan | No clear state rule | Not stated in the rule | Not stated | 6% | Source |
| Minnesota | Insurer must include it | Included | Not stated | 6.875% | Minn. Stat. § 72A.201, subd. 6(1)(a)-(b) |
| Mississippi | No clear state rule | Not stated in the rule | Not stated | 5% | Source |
| Missouri | Not required by state rule | Not stated in the rule | Not stated | 4.225% | RSMo § 144.027 |
| Montana | No general sales tax | Not stated in the rule | Not stated | 0% | Source |
| Nebraska | No clear state rule | Not stated in the rule | Not stated | 5.5% | 210 NAC 60 |
| Nevada | Insurer must include it | Included | Not stated | 6.85% | NAC 686A.680(1)(a)-(b) |
| New Hampshire | No general sales tax | Not stated in the rule | Not stated | 0% | N.H. Admin. R. Ins 1002.15(e) |
| New Jersey | Insurer must include it | Not stated in the rule | Not stated | 6.625% | N.J.A.C. 11:3-10.2 |
| New Mexico | No clear state rule | Not stated in the rule | Not stated | 4% | Source |
| New York | Insurer must include it | Not stated in the rule | Unconfirmed | 4% | 11 NYCRR 216.6(b) |
| North Carolina | Insurer must include it | Included | Not stated | 3% | 11 NCAC 04 .0418(f) |
| North Dakota | No clear state rule | Not stated in the rule | Not stated | 5% | Source |
| Ohio | Owed when you buy a replacement | Not stated in the rule | Not stated | 5.75% | Ohio Adm.Code 3901-1-54(H)(6)(c), (H)(7)(f)-(g) |
| Oklahoma | Insurer must include it | Included | Not stated | 4.5% | 36 O.S. § 1250.8(A)(1)-(2) |
| Oregon | No sales tax; fees included | Included | Included | 0% | OAR 836-080-0240(2)-(3), (14) |
| Pennsylvania | Insurer must include it | Not stated in the rule | Not stated | 6% | 31 Pa. Code § 62.3(e)(4) |
| Rhode Island | Insurer must include it | Included | Not stated | 7% | 230-RICR-20-40-2.8(A)(5)(a), (B)(1)(a)-(b), (E)(3) |
| South Carolina | No clear state rule | Not stated in the rule | Not stated | 5% | Source |
| South Dakota | No clear state rule | Not stated in the rule | Not stated | 4% | Source |
| Tennessee | Insurer must include it | Included | Unconfirmed | 7% | Tenn. Comp. R. & Regs. 0780-01-05-.09(1)(a)-(b) |
| Texas | Not required by state rule | Not stated in the rule | Not stated | 6.25% | Taylor v. Root Ins. Co., No. 23-50667 (5th Cir. July 24, 2024) |
| Utah | Insurer must include it | Included | Included | 4.85% | Utah Admin. Code R590-190-11(1)(a)-(b), (2)(a), (10)(e) |
| Vermont | Insurer must include it | Included | Included | 6% | Vt. Ins. Reg. I-79-2 (Fair Claims Practices), § 8(B)(1)-(2), Code Vt. R. 21-020-008 |
| Virginia | No clear state rule | Not stated in the rule | Not stated | 4.15% | 14VAC5-400-80 |
| Washington | Insurer must include it | Included | Not stated | 7% | WAC 284-30-391(4)(e) |
| West Virginia | Insurer must include it | Not stated in the rule | Not stated | 6% | W. Va. Code R. § 114-14-7.4(a)(4) |
| Wisconsin | No clear state rule | Not stated in the rule | Not stated | 5% | Wis. Admin. Code Ins 6.11 |
| Wyoming | No clear state rule | Not stated in the rule | Unconfirmed | 4% | 044-33 Wyo. Code R. § 33-4 |
What these rules cover
These rules set what a cash settlement for a totaled car must include when you claim on your own policy. A claim against the at-fault driver's insurer is a claim for damages. The settlement rule covers it only where the table says so; elsewhere, whether tax is owed depends on the state's damages law.
"Not required" means we found no state rule that requires it; your policy can still promise it. "No clear state rule" means the rules do not say either way. In both cases, read the settlement section of your policy and ask the adjuster to show how the tax line was set.
Fees marked "Not stated in the rule" may still be owed under your policy. The state pages give the full text of each rule and the points we could not confirm.
How to cite
Fairmark, Total loss sales tax by state, fairmarkvalue.com/total-loss-sales-tax-by-state, last reviewed November 4, 2026.
Free to reuse under CC BY 4.0 with a link to this page. Download the full dataset: CSV · JSON.
General information, not legal advice. Rules change; confirm with your state Department of Insurance.