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Vehicle Sales Tax Questions

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  • Iam buying a vehicle out of new york to mass.Is there a way to save on state sales tax? if the person sells it for a $1 does that have an effect on the tax?
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,328
    Fraud prevention has caused the states to use "Value" tables or some publication like KBB.

    If Obama can reach the "offshore" treasuries of complicated corporations, it stands to follow socialists at all levels of government can do likewise. Tax, tax, tax!
  • dtownfbdtownfb Posts: 2,915
    I think states like NY and Mass. have taken steps to address people "claiming" to buy a vehicle for $1 or even $1000 to avoid state sales tax. I believe Mass. have adopted a policy of using the estimated book value of the used vehicle to determine state sales tax for private sales.

    I would check the state's respective DMV websites to verify how they determine sales tax.
  • heropuppyheropuppy Posts: 1
    My husband is gifting his SUV to my mom. It is registered in MI and my mom lives in NY. Will she have to pay NY sales tax? What can we do to avoid getting taxed? The KBB value is $4825.
  • tidestertidester Posts: 10,110
    I believe that you will at least have to pay a gift tax but these things vary from state to state. Perhaps someone with specific knowledge will jump in and offer guidance. Anyone?

    tidester, host
    SUVs and Smart Shopper
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,328
    He may have to transfer ownership to you so you can "gift" it to your mother as he is not a "blood" relative to her. Papers supporting the relationship will be needed too.
  • kateblakekateblake Posts: 1
    I leased my car last year in Indiana and registered/titled it there. I now need to register my car in Illinois; however, I don't want to have to pay taxes on it again.

    The way my lease is configured, Indiana taxes are included in my monthly payments. I will continue to pay these regardless of whether my car is leased in Indiana or Illinois.

    Does anyone know what Illinois's policy on leased cars is? The value of the car is 17,000 but I will only end up paying 9,100 on it (36 mo. lease).

    My driver's license is also an Illinois license. Would it be cheaper to try to get an Indiana license and keep renewing in that state until my lease is up?
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,328
    WA tax commission has same problem with WA residents leasing OR cars. It has been determined that your drivers license is the same state as where you rest your head at night. Which state is your principal residence will determine and if your insurance policy doesn't match your state license, there is a problem for you.
  • volvomaxvolvomax Posts: 5,274
    Typically, if you change the state of registration you will change tax structure as well.
    You would cease to pay IN tax and start paying IL tax. Most states charge tax on the payment,whatever that is, not on the current value of the car.
  • kyfdxkyfdx Posts: 28,644
    On new leases, Illinois charges tax on the full purchase price.. Indiana charges on the monthly payment...

    I have no idea what Illinois will do on an existing lease brought in from another state, but I'm thinking it won't be pretty... :(

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • 1stin101stin10 Posts: 18
    Hello, I am getting ready to buy a new vehicle in Cook County this Monday. It will be registered at my home in Chicago. I am writing to say there seems to be major confusion out there about the tax rate for Chicagoans. A perfect example of that is this thread from last year.

    As for me, the dealership is telling me my tax will be 9.25%, even though a friend also living in the city paid 8.5% last month, and the IL Dept of Revenue's online "tax finder" tool indicates that for new vehicles the State takes 7.25% and the City of Chicago takes 1.25% for a total of 8.5%. Does anyone knowledgeable about this region's vehicle sales tax know why the dealership thinks it's 9.25%? I've seen other dealers make the same claim online, so if it's legit, why doesn't the State make that info readily available? :confuse:
  • volvomaxvolvomax Posts: 5,274
    If anyone knows what the proper tax rate it, it would be the dealer that has to collect it. It could be a local tax that is the difference. What town is the dealer actually in?
  • 1stin101stin10 Posts: 18
    The dealer is in Arlington Heights, which is Cook County, same as Chicago. The way it works in Illinois is you pay the sales tax based on the address where the car is registered, not where it's purchased. Because I live in Chicago, I get to pay the highest tax in the state. Anyway, my friend who lives in the city and who paid 8.5% last month bought her new Honda from a dealership in the city, so I'm assuming they would know better than anyone what to charge city residents. In the end, the difference is not that large. I just want to understand what the correct answer is.
  • jfitz2jfitz2 Posts: 9
    I live in Texas and I recently bought a vehicle in South Carolina. I just discovered that the check that the dealer sent to the Texas tax office is short $300. While I think this was a genuine error and will be corrected and wanted to see what are the implications of this. I have my bill of sale that shows the correct amount of the transaction and the appropriate sales tax paid on the deal. If the dealer chose not to pay the remainder, who is liable for it and can I still get my registration? Any information would be greatly appreciated.
  • volvomaxvolvomax Posts: 5,274
    If your buyers order shows the correct amount, the dealer is liable for the shortfall.
  • tidestertidester Posts: 10,110
    Are you sure about that? Ultimately, the customer is responsible for paying the sales tax and the vendor's role is to collect the tax and transmit it to the state. In this case, the vendor (apparently) received full payment of the sales tax from the customer but failed to transmit the full amount to the state. The customer is still liable but the vendor absolutely owes the difference to the customer.

    tidester, host
    SUVs and Smart Shopper
  • volvomaxvolvomax Posts: 5,274
    Yes, if the customer can prove they paid the full amount to the dealer, it is up to the dealer to transmit that full amount to the state. If the customer didn't pay the full amount,then the dealer can request the missing money form the customer.
    Hopefully for this customer,the amount listed on his contract is the correct amount.
  • tidestertidester Posts: 10,110
    Either way, the dealership has to be registered as a vendor in the state and if it's not remitting the full sales tax then they could be in trouble. It would be in the dealership's best interest to properly dispatch the matter promptly. :)

    tidester, host
    SUVs and Smart Shopper
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,328
    you pay the sales tax based on the address where the car is registered, not where it's purchased.

    In WA, you pay the sales tax based on the address of where it's purchased.

    Your rule makes more sense.
  • jfitz2jfitz2 Posts: 9
    So the issue has been resolved. The dealer sent $300 to the South Carolina tax office. I found out that South Carolina has a cap on auto sales tax of $300. They just forgot to indicate that on the form they sent to the TX DMV. They are correcting the issue. Thanks to all for your input.
  • tidestertidester Posts: 10,110
    Thanks for the followup. I'm glad you got that resolved!

    tidester, host
    SUVs and Smart Shopper
  • 1stin101stin10 Posts: 18
    For anyone getting ready to register a new car in Chicago, this is what I learned when I bought my new Subaru today: expect to pay 9.25% in sales tax. This is the breakdown:
    7.25% State of Illinois
    1.25% City of Chicago
    0.75% Cook County (good luck trying to find info about this online)

    In addition to the tax, Crook County - no, that's not a typo - charges a flat $15 fee for new car purchases. My salesman said it's been the same amount for nearly 20 years, so somehow the county schemers have overlooked an update.

    Lastly, those of us in Chicago also pay an annual $120 "city sticker" fee. I know there are stickers for the other towns/villages in the county and a county sticker for those in unincorporated areas, but I don't know specific dollar amounts.

    When you take into consideration the high cost of gas in the city (now at $3 and above) relative to the surrounding "collar" counties and the absolutely crazy new rates for parking meters and garages, it's no wonder I went without a car for nearly 10 years. But leaving the dealership today, I was definitely enjoying that "new car" smell. :)
  • volvomaxvolvomax Posts: 5,274
    Congrats on the NC!
    I figured there had to be some local tax that wasn't being disclosed.
  • tallman1tallman1 Posts: 1,874
    In WA, you pay the sales tax based on the address of where it's purchased.

    I'm a little late here, but to further clarify... if you purchase a vehicle out of state and register it in WA, you pay the sales tax rate of the county in which you register the vehicle. That didn't make sense to me but it is what I did. Saved me some cash too.
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,328
    Makes buying in Oregon more attractive than King County, eh?

    What is your location's ST %? Mine is 7.7%
  • volvomaxvolvomax Posts: 5,274
    No tax in OR only works if you are a resident of that state.
  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,328
    A WA resident does not pay an OR tax when he purchases in OR, but when he registers it in his home county he pays that Excise (Sales) Tax rate of his county.

    Whe a WA resident buys in King County, the % is 9.9% & that is what the buyer pays no matter where else he might reside.

    Thus, when you live in a lower tax county, purchasing in OR can be more economical than King county. ;)
  • tallman1tallman1 Posts: 1,874
    I've bought a couple of vehicles in Oregon while living in Washington. Not to avoid taxes, but to get exactly what I wanted. My tax rate is 8.4% but I was working in Thurston county a couple of years ago so I registered it there. I figured that I'd pay my home rate but was pleasantly surprised that I only had to pay their (lower) rate.
  • We want to buy a used car from a dealer in Georgia. We live in New york state. The salesman says "of course we can handle the sales tax for New York". I just want to make sure that this is not going to be a hassle to register it once we get it back to New York.

    Does anyone know if a Mitsubishi dealer in Georgia can collect and properly submit the New York State sales tax to New York so that I can include the purchase price and taxes all into the same loan?
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