Taxable Price
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Bulletin: Dealers and Tag & Title Agents
From: Vehicle Services Division
PURPOSE
To clarify what can and what cannot be included in the taxable total purchase price for a vehicle sold by a Maryland auto dealer.
SUMMARY
Maryland law defines “total purchase price” as the retail value of a vehicle as certified by the dealer, including any dealer processing charge, less an allowance for trade-in of a non-leased vehicle with no allowance for other nonmonetary consideration, including down payment or manufacturer’s rebate. Total purchase price is used to calculate the amount of excise tax due. As of July 1, 2025, the excise tax for most vehicles is 6.5% of the total purchase price.
The taxable price of the vehicle includes:
- Retail purchase price
- Shipping or freight charges
- After manufacture items included with the vehicle at time of purchase (1)
- Manufacturer rebates
- Dealer processing fee (up to $800 for Maryland dealers)
The taxable price of the vehicle may not include:
- Dealer trade-in allowance
- Dealer discounts or rebates
- Extended warranties associated with the parts and performance of the vehicle
- Mechanical repair contracts
- Federal excise tax
- Electronic registration fee
- Equipment installed to accommodate a person with a disability
If you have any questions or comments, please reach out to Thomas Stottlemire ([email protected]), Shanequa Richards-Marks ([email protected]), or Lynette Foster ([email protected]).
(1) After manufacture items include VIN etching and protective coatings that have a limited warranty built-in with the price of the product.