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Vehicle Sales Tax Questions

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  • volvomaxvolvomax Posts: 5,274
    Most states have a reciprical relationship w/ AZ for taxes.
    Meaning that if you pay tax in that state, that amount is credited towards your AZ tax.
    If you pay no tax out of state, you pay the full 8.1% tax in Phoenix(Actually, I think it just went up)
    If you have a residence in Tuba City, you MAY be able to register a car there.
    However, if you only have a residence in Phx, I don't believe you can.
  • I purchased a house recently and to try to clinch the deal the seller threw in two jet skies. When my son went to transfer the titles the tax women asked him what he thought the vehicles were worth. He answered about $5000.00 each whereby she said he would need to pay full tax on $10000.00, He had to leave as he did not have enough money.
    Why do I have to pay tax on a vehicle I did not pay anything for?
  • tidestertidester Posts: 10,110
    Why do I have to pay tax on a vehicle I did not pay anything for?

    Probably for the same reason some states require you to pay sales tax on the full retail price of an item that you buy at a half off sale. :mad:

    tidester, host
    SUVs and Smart Shopper
  • I should pose my tax question in the tax forum. Bottom line is if you are currently in a lease, and trading the leased vehicle in early at another car company, do you receive tax "credit" towards the purchase or leasing of another vehicle? Example:

    20K Trade in Allowance on 20K Payoff of Existing Lease
    15K Purchase Price of new car

    Does this transaction net to zero tax, or X% of the 15K purchase price?

    Thanks for any insight. :confuse:
  • volvomaxvolvomax Posts: 5,274
    You only recieve a tax credit IF you paid the full tax when you bought the car.
    Most states have you pay tax as you go on the payment, so there is no tax credit to issue.
  • In Illinois we pay full tax when we LEASE the car. Same goes for Texas. So, in your opinion, there is no tax on my example above?
  • I'm still pretty unclear on this whole thing and I should clarify a few things.

    1. I am currently in a LEASE in Illinois. (We pay full sales tax at lease inception)
    2. Trade in would be going to a different manufacturer/dealer. ex. Trade in Toyota to Honda.
    3. Trade-in "allowance" is greater than purchase price of new vehicle.

    This appears to be pretty "black and white" but I can't seem to get an answer. I've also looked at IL ST 556 (page 40) and IL Title 86 Part 130.425/455, but am having a difficult time interpreting.

    http://www.revenue.state.il.us/Publications/Sales/STS76.PDF
    http://www.revenue.state.il.us/LegalInformation/regs/part130/130-425.pdf
    http://www.revenue.state.il.us/LegalInformation/regs/part130/130-455.pdf

    :confuse:
  • kyfdxkyfdx Posts: 27,881
    I'm not an expert on Illinois lease taxes... but..

    A lot of companies set-up balloon payment programs, specifically for Illinois, so that the vehicle is in the purchaser's name, and so they get a tax credit on trade, or can avoid additional sales tax if they exercise the purchase option at the end of the balloon period.

    If you've been leasing, and are going to another lease, then you probably aren't going to get any credit at all.

    People say leasing sucks in Illinois, and this is why.

    regards,
    kyfdx
    visiting host

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  • Thanks for the reply. Leasing sucks in IL...ha. you can say that again.

    What I take away from your answer, is, if I go from LEASE to PURCHASE, I will get the tax credit?

    Makes a big difference in overall price.

    Thanks for all your help.
  • kyfdxkyfdx Posts: 27,881
    I don't know for sure.. But, if your current lease is titled in the bank's name (and, that is usually how it works), I don't think you'll get a trade-in credit, at all..

    All you can do is worry about the next time..

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  • volvomaxvolvomax Posts: 5,274
    IF the original tax was paid in full, you should have a credit on your trade in value.
    Unless IL simply doesn't issue any credits.
  • Well, the original tax was paid in full via rolling it into the lease. So technically, it has been paid pro-rata over the existing payment stream. But, will be paid IN FULL at time of Dealer purchase of lease at Trade-In.

    I guess it's not so simple anymore. :blush:
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    Because you can afford the ST is no reason to charge so much to those who can afford more expensive vehicles. "From those who earn it to those who collect it" punishes and discourages thrift, savings, & those of higher incomes.

    Just don't understand the logic of charging more depending on the value of the vehicle.
  • kyfdxkyfdx Posts: 27,881
    Oregon and New Hampshire have no sales tax..

    South Carolina is capped at $300..

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  • volvomaxvolvomax Posts: 5,274
    I'm at a loss here. If the tax is say, 5%, it's 5% for everybody.
    How is this unfair?
    It's a flat tax.
    The income tax that is graded based on how much you earn is WAYYYY more unfair than a sales tax.
  • tidestertidester Posts: 10,110
    punishes ... those of higher incomes

    Perhaps, but one could argue that "those of higher incomes" get a break on things like profits on stocks and bonds where their profits are taxed at rates lower than income taxes and there is no tax on sales. :)

    tidester, host
    SUVs and Smart Shopper
  • volvomaxvolvomax Posts: 5,274
    Perhaps, but one could argue that "those of higher incomes" get a break on things like profits on stocks and bonds where their profits are taxed at rates lower than income taxes and there is no tax on sales.

    Capital Gains! Now THERE is an unfair tax. First, you are taxed on the income you used to buy the stock THEN you get taxed again when you have the temerity to make a PROFIT!
  • tidestertidester Posts: 10,110
    And you stand a chance of having it taxed a third time if you bequeath it to your children because of inheritance taxes! :)

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    SUVs and Smart Shopper
  • volvomaxvolvomax Posts: 5,274
    Yup. You just gotta love the Democrats. :sick:
  • Kirstie_HKirstie_H Posts: 10,830
    If you use that profit to buy, say, a vehicle, a boat, or a house (in Missouri), you have the opportunity to be taxed a FOURTH time - and annually - in the form of property tax.

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  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    Agreed.

    There should be one tax amount for each taxpayer, but if the present system continues.......

    For every $1,000 paid for Income Tax the payer gets one vote.
    When the taxpayer is productive and owns real estate, he votes entire ballot.
    If he doesn't own real estate, he can't vote on real estate taxes.
    If he is NOT productive, lives on the dole & collects permanent welfare, he doesn't vote.
  • cccompsoncccompson Posts: 2,388
    LOL - "lives on the dole"

    What, like the banks and the defense industry?
  • kyfdxkyfdx Posts: 27,881
    Whatever happened to "one man, one vote"?

    Putting more power in the hands of those who already have the money.... That'll fix things! :surprise:

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  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    ""one man, one vote"? = applies to a Democracy, but we're a Republic.

    Run the country like a corporation.

    Why should non productive,non tax payer folk have the position to vote tax burdens on others who do work & pay the taxes? :confuse:
  • kyfdxkyfdx Posts: 27,881
    "non productive,non tax payer folk " = those less fortunate than yourself

    I think removing their voice from government would be a mistake... not to mention a violation of the constitution (as long as we are bringing up our form of government).

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  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,320
    ""non productive,non tax payer folk " = those less fortunate than yourself "

    Those in this country who have a pot and window know what they have done to achieve that level of economic stability while those who don't, know what they haven't done.

    The term "less fortunate" implies helplessness, but not everybody is crippled or retarded. Too many, with ability, have chosen to let the govmint take care of them with our (my) taxes.

    I understand they have that entitlement (right) to vote, but it isn't earned.
  • tidestertidester Posts: 10,110
    but it isn't earned

    All citizens (adults) are subject to laws and regulations. All citizens who are subject to those laws and regulations should have a say in who gets to make the rules. Anything short of that resembles tyranny. Suggesting that one should "earn" the right to vote is a nonstarter.

    In any case, we should make an effort to get back on topic. :)

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    SUVs and Smart Shopper
  • lokkilokki Posts: 1,200
    Here's a pretty good website from the State of Texas on private party sales tax -

    Apparently the state got tired of people declaring that that famous $1.00 sales price for a used car, and started collecting sales tax on the standard presumtive value of the vehicle, based on (Kelly, Edmunds TMV, Smoke Signals?) but still a good place to get a snapshot of what your car is really worth.

    The site allows you to enter a VIN and the odometer reading on a car and get the "Standard Presumtive Value" of the vehicle.

    Interesting reading, but - caution! - it can be depressing.
  • tallman1tallman1 Posts: 1,874
    I'm guessing that you forgot to supply the link. ;)
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