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Vehicle Sales Tax Questions

Kirstie_HKirstie_H Posts: 10,824
Based on recent conversations, it looks like we need a separate discussion to cover sales tax questions. Do you pay where you buy, or where you live? How can you calculate what you'll owe? Can you finance the tax? Let's post our questions and answers here.

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  • I am purchasing within the next two weeks either a Hyundai Santa Fe or Mitsubishi Outlander both the very most basic model.I will most likely purchase the vehicle in Phoenix AZ as the Hyundai dealer in Tucson would not take my interest in looking at a new vehicle seriously. Will deal via the internet or over the telephone. I live in Cochise County, about 140 miles from Phoenix. I have had one quote from a dealer which was $15,644 base price, $1,323.00 tax $299.00 Documents, and $342.38 Lic. After some corrections was told the out the door price was $17,529.07. Are those four items, base price, tax , documents, and licsense the total of costs that a resident of this county in this state will pay? I realise that it will have to be reregistered in one year. Am I overlooking anything?
  • Although I can't comment specifically on who lives where, what I can tell you is for YOU, the WHERE you buy it, in most cases, is irrelevant to where you LIVE.

    That is I live in Town A, WI and buy a car in Town B, WI, in a different county, 30 miles away. Doesn't matter. The tax I pay is based on where I live and where the car will be garaged.

    In most cases, that difference is only "Does my county have a sales tax and the county where I bought it does not"? This is NOT, really, a big issue to consider when buyer either vehicle, IMO.
  • volvomaxvolvomax Posts: 5,274
    In Arizona the sales tax is determined by where you buy the car.
    If you buy a car in Phoenix you pay 8.1 %, if you buy a car in Scottsdale you pay 7.95%.

    As far as the Hyundai is concerned, you'll pay the selling price, sales tax, license fees, and the doc fee. Thats it.
  • bobstbobst Posts: 1,783
    We live in Virginia, just across the border from Maryland.

    When we bought cars in Maryland, we paid sales tax to Virginia. That's how it works around here.
  • alfoxalfox Posts: 716
    a MA resident who buys a car anywhere and registers it in MA pays sales tax to MA - no matter who else you paid.
  • No matter who else you paid? Ouch?

    I live in Ohio (6.5%) and purchased in Indiana (6.0%). I paid 6.0% in Indiana at the time of purchase. When I went to get my Ohio Certificate of Title, I paid an additional .5% (6.5% due to Ohio, minus 6.0% credit as paid to Indiana, I think they call this reciprocity?).

    If the Indiana tax where 7.0%, I would have paid 7% to Indiana and owed no additional tax to Ohio (nor would I have received the extra 0.5% back).

  • kyfdxkyfdx Posts: 27,671
    My guess is... that Indiana rebates that amount to Ohio..

    I bought my M-I-L, who lives in Indiana, a car in Ohio.. Paid $zero sales tax to Ohio.. They gave her a non-resident title, and she paid the tax in Indiana, where she lives..

    Without the rebate, I can't see Ohio letting Indiana keep that money...

    I know it doesn't work that way between Ohio and Kentucky.


    Prices Paid, Lease Questions, SUVs

  • alfoxalfox Posts: 716
    have reciprocity where if a MA resident buys a car out of state they sell it without sales tax, and issue only a temp plate until you can get home and register in your home state. I had a car die in NY years ago and that's how it worked.

    If you move into MA from another state, and can show that you complied with that state's sales tax laws when you bought the car, they do not charge sales tax in MA. The laws are designed to prevent people from going to NH to buy a car, for example, to avoid MA sales tax.
  • robr2robr2 BostonPosts: 7,744
    Further since in New England it's pretty easy to cross borders to do anything, most dealers have the paperwork for the surrounding states. When I bought a car in NH, the dealer had all the MA forms ready to go. I moved my plate to the new car and had 48 hours to go to the Registry and pay my tax and transfer the plate.
  • kyfdxkyfdx Posts: 27,671
    Yes.. that is my understanding of reciprocity also... That the state allows you to buy the car WITHOUT paying sales tax, then you pay it in your home state..

    Sales tax in Kentucky used to be a LOT more than Ohio... And all the dealerships in KY near the state line would advertise: "If you do not live in Kentucky, you do not pay Kentucky sales tax".

    Prices Paid, Lease Questions, SUVs

  • akanglakangl Posts: 3,592
    All this talk of sales tax and buying cars is making me VERY glad I live in Alaska. We don't have a state sales tax.........yet.
  • robr2robr2 BostonPosts: 7,744
    My understanding that it may happen soon.

    But don't some cities (all right the one city) and towns charge sales tax on some items?
  • akanglakangl Posts: 3,592
    Some do on certain items, so far cars haven't been taxed. It will happen eventually, its just one of those things, but for now we are enjoying NOT having a state sales tax or state income tax.
  • No provincial sales tax here in Alberta either....but we have the national GST of 7%. Better than Ontario I guess who pay a whopping 15%.
  • No matter where you buy a car, you owe the tax appropriate for where you live. (I sort of emphasize that because some counties in WI have no sales tax, some counties have there own tax and in the 5 SE WI counties, there is the county tax plus additional tax for Miller Park).

    So, if I buy a car in IL, I have to title/register it in WI, where I live. If (and I don't even know if they would do this) they tried to charge me sales and/or personal property tax--not sure if they have that in IL--then I would probably get that as a credit against tax owed to WI. You don't pay it to both places. IL has no legal right to the money, since you aren't a resident.
  • Unless it went up..........

    In NY sales tax just went to 8.25% in my area from 7%.

    Florida has no state income tax last I knew.....

    Funny tho in Fla.......You can claim a BK and still KEEP your personal home !
    Quite a few of the stock market swindlers bought multi millon dollar homes in Fla. for cash.
    Then filed BK and kept them and kept the $$$$ they stole!
  • You're absolutely right boomer, but if you add in the GST the total is 15%. Its a rough go lol
  • Thanks for the AZ specific information. If I did the numbers right the savings on the $15644.00 between Phoenix and Scottsdale sales tax amounts to $23.46.With Huyundai there are only the 4 items to consider,but do you know anything about how Mitsubishi operates? I have heard that some invoices have a line that would best translate as Dealer extra profit. That may have been a joke.
  • While you are correct in that you pay sales tax on vehicles for where you are a resident, it's not technically correct to state "IL has no legal right to the money, since you aren't a resident". In every other retail transaction the sales tax is paid, not according to residence, but in the jurisdiction where it is purchased. If I go to California and purchase from a California retailer (anything but an automobile) then sales tax is charged at the rate of location of purchase.

    I have never seen a good argument as to why a person's resident jurisdiction gets the sales tax of a transaction completed in another. Personal Property Tax/Ad Valoram yes, I understand, but the sales tax should go to the jurisdiction where the sale happens, as in all other transactions.
  • A person who files for Bankruptcy (7) is able to keep their primary residence in ALL states.

    Bankruptcy laws are both Federal and State. The Federal laws are the most liberal and and the filer has the choice to abide by Federal or State exemptions. The Federal exemptions are:

    $16,150 in equity which serves as a residence
    $2,575 on a motor vehicle
    $8,625 in household furnishings with no single item worth over $425.
    $1,075 in jewelry
    $850 plus up to 2 of the unused residence exemption in any property
    social security, support, unemployment benefits, welfare, VA disability and certain pension benefits.
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