New York Answered Sales Tax and Title Fees Separately, and Got Opposite Answers
The short version. In New York, sales tax is part of what the insurer owes on a total loss and title transfer costs are not required at all. "Tax, title and tags" is one phrase, so people assume it is one rule. In New York it is two rules with opposite answers. And on an owner-retained total loss, where the tax is added changes the cheque, because it goes on before the salvage deduction, not after.
That last point is the one worth reading twice, because it is arithmetic and it is in the regulator's own opinion.
The two questions, as the Department received them
New York's insurance regulator publishes Office of General Counsel opinions, which are the Department's own answers to questions put to it. Opinion 08-10-13, dated 30 October 2008, took two:
(1) When a claimant elects to retain title to an automobile that is a total loss...is the amount of sales tax added to the value of the vehicle prior to the accident, or added after the deduction for the salvage value has reduced the value of the vehicle? (2) Must an automobile insurance company include title transfer fees as part of a settlement for the actual cash value of a motor vehicle upon its total loss?
Read question one carefully. It is not "does the insurer owe sales tax." It is where in the sum the tax goes when you keep the wreck.
Answer one: before the salvage deduction
The amount of sales tax is added to the value of the vehicle prior to the accident, in accordance with the definition of actual cash value in § 216.6(b)(2) of 11 NYCRR 216 (Regulation 64), before the deduction for the salvage value is taken.
Order of operations decides the number. Add the tax to the pre-accident value and then subtract salvage, and the tax is calculated on the whole car. Subtract salvage first and add tax to what is left, and it is calculated on a smaller figure. Same regulation, two different cheques, and the Department says the first one is right.
This only arises when you keep the vehicle. On a straightforward total loss where the insurer takes the salvage, there is no deduction to sequence.
Answer two: title costs are not required
No. An insurance company is not required under the New York Insurance Law or regulations promulgated thereunder to include title transfer costs associated with the purchase of a replacement vehicle in determining the actual cash value of a motor vehicle that has suffered a total loss.
That is a flat no, and it is the Department saying it about its own law.
The opinion adds one thing that matters if an insurer has offered:
there is also no prohibition in paying that extra sum as a component of loss, so long as it is done in a uniform and non-discriminatory manner.
So an insurer may pay title costs. It just cannot be made to, and if it does it for some claimants it should be doing it for all of them.
Why this trips people up everywhere, not just in New York
The phrase "tax, title and tags" comes from buying a car, where all three are lines on the same invoice. In insurance they are three separate questions and states answer them separately.
Some states name taxes and transfer or registration fees together in one provision, so all of it is owed. New York names sales tax in the definition of actual cash value and says nothing requiring title costs, so one is owed and the other is not. A blanket "insurers must pay tax, title and tags" is wrong in New York on its second and third words.
If you are outside New York, do not carry this answer with you. The register behind why the first check is low records what each state we have read actually says, and how far we have read.
What this page does not tell you
What your policy says. Regulation 64 sets a floor for what actual cash value means. A policy can be more generous, and some are.
Whether the offer is right. Sequencing the tax correctly does not make the underlying valuation correct. Those are separate arguments and the second one is usually the bigger number.
Anything about repair, as opposed to total loss. Regulation 64's actual-cash-value definition is about the item repaired or replaced. This opinion is answering total-loss questions.
Sources, and one note on which opinion this is
- New York State Department of Financial Services, Office of General Counsel Opinion 08-10-13, 30 October 2008, read on 18 August 2026 from the Department's own site. All four quotations above are from that opinion.
- The regulation it construes is 11 NYCRR 216.6(b)(2), Regulation 64.
Our machine-readable total-loss register already carried New York, recorded against a different and earlier Department opinion, 01-03-11, which quotes Regulation 64's operative sentence: "Such amount shall include all monies paid or payable as sales taxes on the item repaired or replaced." The 2008 opinion does not contradict it. It answers two questions the 2001 one did not reach: the sequencing on an owner-retained salvage, and title costs.
- Total loss: why the first check is low
- Will my car get a salvage title?
- Where to file an insurance complaint, in every state
General consumer information: not legal, insurance, or financial advice. Requirements, coverage, and practices vary by state, policy, and manufacturer.
Where this fits
Each link says what it is for. We add one only when a reader on this page has a real reason to need that page next.
- Total Loss: Why the First Check Is Low, and Why Cashing It Can End Your Leverage (what every other state we have read says about taxes and fees)
- Will My Car Get a Salvage Title? (the owner-retained salvage this opinion is about)