North Carolina Highway Use Tax (HUT)
North Carolina does not charge sales tax on vehicles. It charges a Highway Use Tax of 3% when the title is transferred — one of the lowest vehicle purchase taxes in the country — and then recovers the difference through an annual county property tax billed alongside your registration.
Cheap to buy
At 3%, buying a $25,000 car costs $750 in tax where a 6.25% state would take $1,563 and a 7% state $1,750. On the purchase alone, North Carolina is among the least expensive states in the country to register a vehicle.
The catch: Tag & Tax Together
North Carolina bills your county vehicle property tax on the same notice as your registration renewal, so a single payment covers two very different charges. The property tax is set by your county and based on the vehicle’s assessed value, and on a newer car it can dwarf the $46.25 registration fee sitting next to it on the notice.
Why the notice surprises people
Drivers moving from a state that separates the two often read the combined figure as "registration" and conclude North Carolina is expensive. It is not — it has simply merged a property tax bill into the same envelope. The property tax portion falls as the vehicle depreciates; the registration portion does not.
Questions about the amount
Because the two charges come from different authorities, they are disputed in different places: registration fees are a DMV matter, while the assessed value behind the property tax is set by your county assessor.
Official source
NCDMV — Vehicle Taxes ↗ — the figures on this page are checked against it, most recently on 2026-08-20. See how we verify fees.
Common questions
What is the NC Highway Use Tax?
A 3% tax charged when a vehicle title is transferred, in place of sales tax.
Do I pay sales tax on a car in North Carolina?
No — the 3% Highway Use Tax replaces it, which makes buying comparatively cheap.
What is Tag & Tax Together?
North Carolina’s system of billing county vehicle property tax on the same notice as your registration renewal, so both are paid in one transaction.
Why is my NC renewal notice so high?
Almost certainly the county property tax portion rather than the registration fee, which is $46.25. The property tax is based on your vehicle’s assessed value and falls as it depreciates.