Pay sales tax on new-car destination fee?

Tara Baukus MelloQuestionDear Driving for Dollars,
Do I need to pay sales tax on the destination fee when I buy a new car?
-- TMK

AnswerDear TMK,
Sales tax is calculated on the total price you agree to pay for the car. On a new car, that would include the destination fee -- a freight fee the manufacturer charges the dealer to get a new car to the lot.

All auto manufacturers charge destination fees, and all are listed plainly on the window sticker for every new car. When you review the purchase paperwork before you sign the contract, compare the destination fee listed to the car's window sticker to ensure they match. For a list of other fees you should pay and ones you should watch out for, read the Bankrate story on not paying unnecessary dealer fees.

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If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.

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