What could I have done?
sales used tax you guys paid after purchase
- Thread starter sokudo88
- Start date
What could I have done?
$0. One cool thing about AZ.
How about if you declare the car as a gift?? Do you still get taxed?
The way it is in FL. If it is listed as a 'gift' then they take the book value, I don't know which book, and charge you the tax of that dollar figure.
Either way, they are getting a nice chunk of change from you.
I had to pay around 1600. The lady at the DMV asked me if I made a mistake and had a extra zero on the sale price. I kind of felt like she was asking me to lie to save a few bucks.
I was also concerned about the possibility of insurance company issues if the car is totaled. If the car got totaled the month after you bought it I think it would be tough to argue the car the car is worth 30k when you stated to the BMV you pay 3k.
I was also concerned about the possibility of insurance company issues if the car is totaled. If the car got totaled the month after you bought it I think it would be tough to argue the car the car is worth 30k when you stated to the BMV you pay 3k.
I have another question:
If I go to a store, and buy a hammer, I pay tax on the hammer. Then I sell the hammer to my friend for $5, there is no tax on that. If he sells the hammer to his friend for $2, or $40, there is no tax on that either. Sales tax is charged ONCE.... not 50 times. That hammer, isn't taxed everytime it goes from one guy to the next.
How is it then, that a car is taxed over and over? If the original buyer paid tax, and he sells it to me used, why should I have to pay tax on that again? Because they can control it and they can't control what happens with a hammer? because I have to register a car and I don't have to do it to my hammer?
What is it that I am not understanding, this whole principle makes no sense to me. Why is a car taxed over and over and over?
If I go to a store, and buy a hammer, I pay tax on the hammer. Then I sell the hammer to my friend for $5, there is no tax on that. If he sells the hammer to his friend for $2, or $40, there is no tax on that either. Sales tax is charged ONCE.... not 50 times. That hammer, isn't taxed everytime it goes from one guy to the next.
How is it then, that a car is taxed over and over? If the original buyer paid tax, and he sells it to me used, why should I have to pay tax on that again? Because they can control it and they can't control what happens with a hammer? because I have to register a car and I don't have to do it to my hammer?
What is it that I am not understanding, this whole principle makes no sense to me. Why is a car taxed over and over and over?
What you paid for the car is not relevant when it comes to insurance. Unless you have a "stated value" policy, what matters is how much it costs to replace it.
I could be wrong, but I believe that technically you are supposed to collect sales tax for that hammer when you sell it and then send that money to the state. Of course in practice this is impossible to enforce or administer, so they don't even try.
Really! so technicaly we all should be in jail?
I haven't sold any hammers.
By the LETTER of the Law YES :smile:
Right now they are working on how to enforce Tax on all Internet sales, eBay...ect
Good thing I bought my NSX for $100.
Good point. If you bought the car from a friend for a great deal the insurance value is unaffected.
That's always bothered me as well - the car was taxed when it was originally sold then gets taxed again when it resells. I've always thought it should get taxed once and that's it.
And of course, here in Mass, (as with other states), we get stuck paying a yearly excise tax based on the car's current value. Fortunately, mine's a 91 so the good ol' Commonwealth doesn't think it's worth all that much and my excise bill is fairly small compared to you guys with newer NSXs.
Just part of the privileges of NSX ownership, I guess.
And of course, here in Mass, (as with other states), we get stuck paying a yearly excise tax based on the car's current value. Fortunately, mine's a 91 so the good ol' Commonwealth doesn't think it's worth all that much and my excise bill is fairly small compared to you guys with newer NSXs.
Just part of the privileges of NSX ownership, I guess.
Nope, you pay sales tax here in Mass. on the HIGHER of the sales price or the book value. That prevents folks from writing bogus bills of sale to help the buyer avoid paying tax. There used to be a time (30 years ago or so) where you could do this and get away with it. No longer.
When I registered my 91, the price I paid was higher than book, so I paid tax on that. I could have been unethical and asked the seller to write me a bill of sale that showed a smaller sales price (closer to book), but I'm not and I knew the seller wasn't either. I simply factored the sales tax into the price of the car when I bought it.
One point to mention that I forgot about: if you buy a used car from a dealer, you pay sales tax on the price you paid, not on the book value. I got this break when I bought my Miata, which was priced cheaper than book.
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Because the DMV has no control of hammer transactions, but they do have control of vehicle transactions.
For internet sales, I thought you only collect taxes for Intrastate sales unless you have a physical store in another state, then you have to collect taxes on Interstate sales to those states also. Otherwise, you pay the taxes when you file your state income tax (quarterly).
Any tax CPAs or Enrolled Agents on Prime to clarify? I'm digressing, let's get back to the oiginally subject. I paid 8.75% + I think $175 registration fee in January 2007. When I registered my NSX, the DMV clerk said to me, "you paid this much for a 10 year old car?" My reply to her was, "you can change the sale price if you think it should be lower." She didn't.:wink:
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Correct. As the consumer, you are resposible for paying 'use tax' to your state government if you purchase something and have it delivered from out of state.
I didn't think that, and I didn't get that impression. I apologize if that could be inferred from my reply, but I really didn't think my wording implied that, either.
yep. in SC there is a spot on your income tax form for you to declare any items purchased out of state that you should be paying the 'use tax' on... a bit over the top IMO but oh well.
$6,010.82 on a $70k purchase in CA
geez. did they name your street after you?
$6,010.82 on a $70k purchase in CA
Shifty, thanks for making me feel better.
ok for example. what if the car you're buying has some problems that needed
attention and that the seller lowers the price down a bit to complete the trasaction? when you register the car under yr name, will DMV asks why you purchased the car below blue book value or will they asks something else in particular ?
let's say you're buying a used 91 nsx for 26k then seller elaborated all these types of problems that needs to be fixed. for example, changing clutch, timing belt and water pump. we know how much exactly will costs with these type of repairs........let's say......around 4k ? correct me if i am wrong, and that price includes parts and labor. the seller then lowers the price a few thousands more to let's say.........$22k.
my questions is, if seller and buyer agreed to that price of 22k, will that be acceptable at DMV when you register it under yr name ?
attention and that the seller lowers the price down a bit to complete the trasaction? when you register the car under yr name, will DMV asks why you purchased the car below blue book value or will they asks something else in particular ?
let's say you're buying a used 91 nsx for 26k then seller elaborated all these types of problems that needs to be fixed. for example, changing clutch, timing belt and water pump. we know how much exactly will costs with these type of repairs........let's say......around 4k ? correct me if i am wrong, and that price includes parts and labor. the seller then lowers the price a few thousands more to let's say.........$22k.
my questions is, if seller and buyer agreed to that price of 22k, will that be acceptable at DMV when you register it under yr name ?
I'm sure the answer varies considerably by state.
I wouldn't say I never fudged on the purchase price when paying my taxes in decades past, but a lot of places are more sophisticated about it now. Seems to me it might be possible to understate things a bit, but a big swindle is harder to come by.
Not in my state. What gets me is that they don't just say everyone pays book value... they have the balls to say "give me tax on book value if you bought it for less... but then... if you bought it for more, give me tax on that instead". Or in my case, they don't have book value, nor do they care what I paid, they just charged me what the car's MSRP was even when it was a used car with 3600 miles on it. Over a year old at the time.
I swear in a car's lifetime, the DMV must at times collect as much tax from various owners as what the car cost to begin with.
