The Arizona Vehicle License Tax (VLT) is a mandatory vehicle registration fee for Arizona drivers. It is assessed in the place of personal property tax that is charged in other states.
The VLT is a fluid number in that it changes every year because it is based on the value of your vehicle. The other fees you’ll pay in Arizona are fixed.
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What is a Vehicle License Tax?
As mentioned, Arizona's VLT is part of the annual fees that registered drivers pay in Arizona. The VLT is paid in lieu of a personal property tax, which is charged in other states.
The VLT is a fluid number that changes yearly as it is based on the assessed value of your car. If math is your equivalent to the scary monster under the bed, don’t fret—calculating your VLT is simple.
Calculating your VLT
Your VLT calculation will change each year you register your car. The VLT is based on the assessed value of 60% of the manufacturer’s base price. Each year you register, you reduce this value by 16.25% to factor in depreciation before doing a few more calculations.
Here’s a breakdown of how to calculate your VLT for both new and used cars. Or, if math isn't your strong suit, you can use Arizona's VLT calculator
to find the amount you owe. Calculating VLT for a new car
Let’s say you buy a new car for $20,000 and you need to calculate and pay your VLT. Here’s how you can figure out your VLT with just a calculator.
First, subtract 60% from the base retail price. For example, $20,000 - 60% gives us $12,000.
Now, multiply $2.80 for every $100 of your car’s assessed value. In this case, it will be 120 x 2.80 = $336.
$336 is the amount you pay for your VLT.
Calculating VLT for a used car
Fast-forward a year. You’ll once again have to pay VLT, but the math will be a bit different. While your VLT is based on the calculated value of 60% of the manufacturer’s price, you reduce that value by 16.25% for each successive year you register your car.
So, we have a car originally priced at $20,000, but let’s reduce that by 16.25% since it’s a year old. We’re working with a base price of $16,750.
Subtract 60% from the new base value. $16,750 - 60% = $10,050.
Since this is now a used car, the next stage of your VLT calculation is a bit different. You’ll multiply $2.89 for every $100 of your now-used car’s assessed value. Here’s what it looks like: 100.50 x 2.89 = $290.45.
$290.45 is the amount you pay in VLT for your car’s second year of registration.
Key Takeaway The amount you pay in VLT will change each year you register your car. Arizona offers a handy-dandy calculator in case math isn’t your strong suit.
Do I need to register my car in Arizona?
If you reside in Arizona for seven months or more during one calendar year, you must get a license and register your car.
Of course, Arizona has many part-time residents, such as snowbirds who stay throughout the winter to escape the cold weather up north. If you’re a part-time state resident, figure out how long you’ll be in-state and register your car if necessary.
Arizona vehicle license tax exemptions
As a rule of thumb, most Arizona residents who drive a car must pay the VLT. There are, however, numerous exemptions to paying the VLT based on who you are, where you work, and what you drive.
Here are some of the most common exemptions to paying Arizona’s VLT:
|
|---|
Alternative fuel vehicle/electric vehicle owners |
Non-government emergency service personnel |
Vehicle used for a non-profit organization, school, or religious institution |
Recipient of social security income disability payments from the federal government |
|
Survivor of fallen first responder |
Survivor of fallen military member |
Indigenous American tribe member |
Specialized military exemption |
100% disabled veteran exemption |
Vehicle purchased with VA grant |
How often do I pay the VLT?
As an Arizona resident and registered driver, the VLT is part of your annual driver registration fees and is the costliest component of those fees. Your fees are broken down in the following manner:
$1.50 air quality research fee
Vehicle License Tax (as calculated above)
MORE: How to deduct a car accident from your taxes
The VLT and you
If you are a full-time or part-time Arizona resident and you’ve registered a car in the state, you’ll need to pay the VLT each year. The cost can feel like a bit of a burden, but finding savings in other places—like cheap car insurance—can help.
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Frequently asked questions
Why does Arizona charge a VLT?
Arizona doesn’t charge a personal property tax, as many other states do. The VLT is a sort-of "in lieu" tax for Arizona to still generate revenue off of vehicle purchases.
I’m a retiree who spends winters in Arizona. Do I need to pay the VLT?
It depends on how much time you spend in the state. If you spend more than seven months per calendar year in Arizona, you’ll need to register your car and pay the VLT.
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