The 13 States With No Personal Property Tax
Personal property tax — a yearly tax on things you own like cars, boats, and business equipment — does not exist in 13 states. Those states are Arizona, Arkansas, Georgia, Illinois, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Carolina, Tennessee, Texas, and Wyoming. If you live in one of these states, you will not receive a bill from your state for owning a vehicle or other personal property, though you may still owe local taxes or federal taxes on the same items.
The absence of personal property tax does not mean these states have no taxes at all. Most make up the revenue through income tax, sales tax, or both. Some states that do not tax personal property still allow local governments — counties or cities — to tax it, so your actual tax burden depends on where you live within the state, not just which state you live in.
If you are moving to one of these states or already live in one, understanding what you do and do not owe prevents overpaying and helps you plan your finances. The rules also change if you own a business or operate a vehicle commercially.
Key Takeaways
- Thirteen states have no personal property tax at the state level: Arizona, Arkansas, Georgia, Illinois, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Carolina, Tennessee, Texas, and Wyoming.
- Some of these states allow counties or cities to impose personal property tax even though the state does not, so check your local government's rules.
- States without personal property tax typically rely on income tax, sales tax, or both to fund government services.
- Vehicles registered in states without personal property tax may still be subject to registration fees, which are not the same as personal property tax.
- Business equipment and commercial vehicles may face different tax rules even in states that do not tax personal property for individuals.
How Personal Property Tax Works in States That Have It
In states that do tax personal property, you typically owe a yearly tax based on the assessed value of items you own. The tax applies to vehicles, boats, recreational equipment, business machinery, and sometimes household goods. The tax bill arrives annually, and the amount depends on what the item is worth and the tax rate in your area.
States that collect personal property tax use the revenue for schools, roads, and local services. The tax is separate from registration fees for vehicles — a registration fee is what you pay to legally drive a car on public roads, while personal property tax is a yearly tax on ownership itself. Some states charge both; others charge only one.
The 37 states that do tax personal property vary widely in what they tax and at what rate. Some tax only vehicles; others tax a broader range of items. Rates range from less than 0.5% to over 2% of the item's assessed value, depending on the state and sometimes the county.
States Where Local Governments Can Still Tax Personal Property
Even though 13 states have no state-level personal property tax, some of them allow individual counties or cities to impose it. This means you could live in a state on the no-tax list and still owe personal property tax to your local government. The rules differ by state and sometimes by county within that state.
Arizona, for example, does not have state personal property tax, but some counties allow it. Georgia does not tax personal property at the state level, but local governments can. Illinois has no state personal property tax, but local taxing districts may assess it. Before assuming you owe nothing, check with your county assessor or local tax office to learn what your specific county or city requires.
The best way to find out is to contact your county assessor's office directly or visit your county government's website. They can tell you whether personal property tax applies where you live and what items are taxed.
How Vehicle Registration Differs From Personal Property Tax
Vehicle registration fees and personal property tax are two separate charges, and it is straightforward to confuse them. A registration fee is what you pay to legally operate a vehicle on public roads — it covers the cost of issuing your license plate and maintaining the registration system. Personal property tax is a yearly tax on the value of the vehicle itself.
All 50 states charge registration fees for vehicles, regardless of whether they tax personal property. If you live in a state without personal property tax, you will still pay registration fees. The fee may be a flat amount, based on the vehicle's weight, or based on its value, depending on the state. Some states call this a registration fee; others call it a registration tax.
In states that do tax personal property, you typically owe both the registration fee and the personal property tax. In states that do not, you owe only the registration fee. Understanding which you are paying helps you budget correctly and know what to expect when you renew your vehicle registration.
Business Equipment and Commercial Vehicles in No-Tax States
States that do not tax personal property for individuals sometimes have different rules for business equipment and commercial vehicles. Some states exempt business property from personal property tax entirely; others tax it even though they do not tax personal property owned by individuals.
If you own a business or operate a commercial vehicle, check your state's rules on business property tax. The rules may depend on the type of business, the value of the equipment, or whether the equipment is used primarily in that state. A state tax office or a tax professional can clarify what you owe.
This distinction matters because business property tax can be substantial if your state imposes it. Even in a state on the no-tax list, you could face significant tax bills on equipment or vehicles used for business purposes.
States That Tax Personal Property and Their Rates
The 37 states that do tax personal property charge rates that vary by state and sometimes by county. Some states tax only vehicles; others tax a broader range of personal property. Rates typically range from less than 0.5% to over 2% of the assessed value, though some states use different methods to calculate the tax.
States like Virginia, West Virginia, and Kentucky tax vehicles and other personal property. States like California and New York tax business property but not household items or vehicles. The variation is wide enough that two neighboring states can have very different personal property tax burdens.
If you are considering a move and personal property tax is a factor in your decision, research the specific state and county you are moving to. The difference between states can add up to hundreds of dollars per year, especially if you own multiple vehicles or significant business equipment.
What to Do If You Are Moving to a No-Tax State
If you are relocating to one of the 13 states without personal property tax, you do not need to do anything special to avoid the tax — it straightforward does not exist at the state level. However, you will still need to register your vehicle and pay registration fees. You may also owe local personal property tax if your county or city imposes it.
When you move, update your vehicle registration with your new state's motor vehicle department. Some states allow you to transfer a registration from another state; others require you to register the vehicle as if it were new. The process and fees vary by state. Contact your new state's motor vehicle department to learn what you need to do.
If you own a business or commercial equipment, contact your new state's tax office or a tax professional to understand what property taxes you may owe. The rules are specific enough that professional guidance can save you money and prevent penalties.
Frequently Asked Questions
Do I still have to register my car in a state without personal property tax?
Yes. Registration fees exist in all 50 states and are separate from personal property tax. You will pay a registration fee to legally drive your vehicle, but you will not owe personal property tax at the state level. Some counties may still impose local personal property tax, so check with your county assessor.
If I move from a state with personal property tax to one without, do I get a refund?
No. Personal property tax is typically paid annually, and you do not receive a refund for the year you move. However, once you register your vehicle in the new state, you will not owe personal property tax going forward if that state does not impose it.
Can I avoid personal property tax by registering my vehicle in a no-tax state if I do not live there?
No. States require you to register a vehicle in the state where you live or where you primarily keep it. Registering a vehicle in a different state to avoid taxes is illegal and can result in fines or criminal charges. You must register where you actually reside.
Are property taxes on a house the same as personal property tax?
No. Property tax on a house is real property tax and exists in all 50 states. Personal property tax applies to items you own like vehicles and equipment, not to real estate. The two are separate taxes, and a state can have one without the other.
What counts as personal property for tax purposes?
Personal property typically includes vehicles, boats, recreational equipment, and business machinery. Household goods like furniture and appliances are usually not taxed. The exact definition varies by state, so check your state's tax office for a complete list of what is taxed in your area.