Sales Tax Guide
Sales tax is a state level tax and depends on the address that will be displayed on the title (most likely your residence) or your business address if buying and registering/titling to your business. The state that is reflected in your address on our bill of sales determines the sales tax treatment (rate and who it is paid to).
Most common scenarios
- Rhode Island addresses pay 7% on the taxable sales price when registering the vehicle at the RI DMV.
- Massachusetts addresses are required to pay 6.25% on the taxable sales price to the Rhode Island dealer (Mongeon’s Auto). This tax will appear as a line item on the bill of sale. We are then required to send the sales tax to the RI Division of Taxation. You will not be required to pay sales tax when registering at the MA RMV.
- Connecticut addresses are required to pay 6.35% on the taxable sales price at the CT DMV when registering the vehicle.
Remaining States
Vehicles sold to addresses in the states below that are green are responsible to pay sales tax to the state’s motor vehicle department when registering the vehicle (we do not collect any sales tax). Residents of states in yellow will need to pay their sales to the Rhode Island Dealer (Mongeon’s Auto) upon purchase and will be exempt from sales tax when registering.
Unlikely circumstances
If we are required to collect sales tax because your address is in a yellow state and you would like to register in any other state please do some research to avoid paying sales tax twice. It does not change our requirement to collect the tax.
Service Contracts
If you purchase a service contract it is not subject to sales tax.
Fees
We do not charge a documentation fee or title preparation fee. You will pay sales tax on these amounts if you buy from a dealer who charges for these services. We do however charge for temporary RI plates at our cost of $25.50 and this amount is subject to sales tax.
