Arkansas vs Tennessee
Registering a new $35,000 vehicle costs about $2,573 in Tennessee versus $3,665 in Arkansas — a $1,092 first-year advantage for Tennessee.
Cost comparison
| Arkansas | Tennessee | Difference | |
|---|---|---|---|
| First-year total All-in cost to register a new $35,000 gas vehicle for the first time, including sales tax, title, and registration. | $3,665 | $2,573 | +$1,092 |
| Annual renewal (year 2+) Recurring annual cost after the first year — what you actually pay every year you own the car. | $290 | $59 | +$231 |
| Sales tax (one-time) Sales/use/excise tax owed at purchase on a $35,000 vehicle, using typical local rates. | $3,325 | $2,490 | +$835 |
| Combined sales tax rate State rate plus typical local rate (where applicable). | 9.50% | 9.50% | matches |
| EV first-year total Same $35K scenario but as a battery electric vehicle, capturing EV-specific surcharges. | $3,865 | $2,773 | +$1,092 |
| EV annual renewal Recurring EV-ownership cost in year 2+. | $490 | $259 | +$231 |
| EV surcharge Annual EV-specific registration fee (zero in states without one). | $200 | $200 | matches |
How each state structures it
Arkansas
Arkansas has a low-cost, simple structure: weight-tiered registration ($17-$30/year), $10 title fee, $5 plate fee, and 6.5% state sales tax with local additions (typically combining to 9-10%). Arkansas also has annual personal property tax on vehicles — assessed at 20% of market value times the county millage rate, giving an effective rate of about 1.00% on full vehicle value statewide. Vehicle purchases under $4,000 are EXEMPT from sales tax — a unique buyer-friendly provision. EV surcharge is among the higher in the US at $200/year (PHEV $100, hybrid $50). A new $35,000 vehicle in a typical Arkansas county runs about $3,640 in first-year costs (driven by 9.5% combined sales tax + $297 first-year property tax), with annual renewals around $325.
Tennessee
Tennessee has one of the more distinctive sales tax structures in the US: 7% state tax on the FULL purchase price, plus a "single article tax" of 2.75% on the portion between $1,600 and $3,200 (max $44), plus local sales tax of 2.25-2.75% applied ONLY to the first $1,600 of purchase. The combined effective rate on a typical $35,000 vehicle works out to roughly 7.2% — counterintuitively LOWER than the headline 9.25-9.75% you'd see in retail stores, because local tax doesn't scale with vehicle price. Beyond sales tax: $29/year state registration, county wheel taxes from $0 to $55 (36 of 95 counties have none), $14 title fee, and a stiff EV surcharge of $200/year (rising to $274 in 2027). Tennessee has no state income tax, so vehicle fees and the gas tax carry more weight in funding state operations. A new $35,000 vehicle in Davidson County (Nashville, $55 wheel tax) runs about $2,617 in first-year costs; in a no-wheel-tax county that drops to about $2,562.
What this means for you
- Buying a new car: Tennessee is roughly $1,092 cheaper than Arkansas in the first year on a $35K vehicle, driven mostly by sales tax and one-time fees.
- Annual renewal: Tennessee is cheaper to renew annually by about $231/year. Over a 5-year ownership period that's roughly $1,155 in renewal-fee savings alone.
- If you drive an EV: Both states charge similar EV surcharges (Arkansas: $200/year, Tennessee: $200/year), so EV ownership cost between the two is comparable.
- Structural differences: Arkansas charges an annual ad valorem property tax on vehicles (renewals stay expensive as long as you own the car), while Tennessee does not — over a 10-year hold this can swing thousands of dollars toward Tennessee.
Frequently asked questions
Is it cheaper to register a car in Arkansas or Tennessee?
Tennessee is cheaper to register a new $35,000 vehicle: $2,573 first year vs $3,665 in Arkansas, and the gap continues into annual renewals.
What is the sales tax difference between Arkansas and Tennessee?
Arkansas charges 9.50% combined sales tax on vehicles; Tennessee charges 9.50%. On a $35,000 purchase that's $3,325 in Arkansas vs $2,490 in Tennessee.
Do Arkansas and Tennessee both charge EV registration fees?
Arkansas: $200/year EV surcharge. Tennessee: $200/year EV surcharge. EV fees are added on top of standard registration costs.
Official sources: Arkansas DFA • TN Dept of Revenue / County Clerks
Data last updated: 2026-05-23