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Vehicle Sales Tax Questions

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  • CalifLookieLooCalifLookieLoo Member Posts: 22
    I'm in California, thinking about buying a car in Nevada. My CU is financing my loan, and states that I am NOT to pay the sales tax or registration fee in Nevada, that they will pay it here. They want the contract faxed to them, and the title to be given to me and driven over to the CU on my way back into town. Why would Nevada allow a car to be purchased in Nevada and let California earn the sales tax?
    It just makes no sense to me. Is this just a simple matter of residency?

    I haven't heard back from the Nevada salesman for 2 days - wondering if the "don't pay sales tax in Nevada" my CU has imposed has stalled the deal?
  • frostbyte3964frostbyte3964 Member Posts: 30
    Is the tax info on states listed anywhere easy to find? I have a residence in UT and looking at getting another in CA soon. Then when buying a car, which would be best to buy in, CA or UT?
  • volvomaxvolvomax Member Posts: 5,238
    Nevada law will govern the transaction,not your credit union.
    If there is a provision for not collecting tax in Nevada then you are ok.
  • volvomaxvolvomax Member Posts: 5,238
    Check w/ the DMV websites for the states in question.
    Or, call them if you can't find the answer online.
  • euphoniumeuphonium Member Posts: 3,425
    You can have one Primary residence. you know the address that is on your IRS return.

    You can have as many Secondary residences as you want, but your Primary residence determines where you pay the ST.
  • euphoniumeuphonium Member Posts: 3,425
    You can have one Primary residence, you know the address that is on your IRS return.

    You can have as many Secondary residences as you want, but your Primary state residence determines where you pay the ST.

    In WA - the point of purchase determines the rate. King County is around 10% and other counties in the state are as low as 7.7%.
  • frostbyte3964frostbyte3964 Member Posts: 30
    OK, so if I currently live in Utah, but am moving to California to be my primary residence then California will become my new residence by law. It looks like sales tax is less in Utah from what I have gathered. If I buy a car in Utah and have it registered, then move to Cali and reregister it, will I have to pay any tax again or just the registration?
  • euphoniumeuphonium Member Posts: 3,425
    Perhaps a 'phone call to Sacramento would be appropriate. They may have some silly 90 day rule.
  • joel0622joel0622 Member Posts: 3,299
    Tax is paid to what ever state you are registering the car in. If you live in California and will have California tags then you pay California tax. If you live in Nevada then you pay Nevada tax. No grey area at all.
  • kyfdxkyfdx Moderator Posts: 236,760
    Except... you can't take delivery in California from a dealer, without that dealer collecting California sales tax..

    Like everything else in life, the answer is always: It depends..

    There are almost as many rules on vehicle sales tax as there are states... Maybe more, since some states have different rules for buyers, depending on which state they live in.

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  • steveonlinesteveonline Member Posts: 1
    I am a California resident. I bought a New York registered car that is stored in New Jersey on ebay. It is a 1965 classic car that I am having the shop fix up a little more in NJ before I bring it back to California. We are getting the parts and getting busy but it might take up to 6 months. I was wondering is there a time limit on the sales tax. Will I have to pay the higher sales tax in California now even though I bought it in February 2009.
  • tallman1tallman1 Member Posts: 1,874
    In WA - the point of purchase determines the rate. King County is around 10% and other counties in the state are as low as 7.7%.

    Interestingly enough, in the case of cars purchased out of Washington state and then registered here, you pay the sales tax rate of wherever you register it.

    I bought my last car in Oregon and knew that I had to pay the sales tax when I went to get my WA tags. I went to a licensing office near where I worked at the time in Thurston County and paid their rate, not the higher Pierce County rate where I live. Saved a few bucks but was shocked it worked that way.
  • newcarsnewcars Member Posts: 103
    I live in South Carolina (official tax home) but spend a good deal of time in New York state. I am thinking about buying an Altima Hybrid in New York (because it is unavailable in South Carolina) but will register it in South Carolina. The new car tax is 4.25% (I think) in New York and 5% in South Carolina. If I purchase the car in New York but register in South Carolina:

    1) Will I pay the 4.25% sales tax in New York when I purchase the car?

    2) Will I pay the 0.75% difference in excise taxes to South Carolina or must I pay the full 5% in excise taxes to South Carolina?

    3) Per the 2009 Automobile Sales Tax Deduction, will I be able to deduct 9.25%, 5%, 4.25%, 0.75% or anything from my Federal taxes?

    Thank you for your help.
  • volvomaxvolvomax Member Posts: 5,238
    The rules vary from state to state.
    FAIK, you will pay the 4.25% tax in NY. NOTE: there may be city and county taxes as well.
    IF the total tax paid in NY is 4.25% you will pay the difference between that and the tax owed in SC.
    You will be able to deduct the total amount of tax paid on your 2010 return.
  • kyfdxkyfdx Moderator Posts: 236,760
    I think the sales tax is closer to 8% in NY?

    And... SC caps auto sales tax at $300, the last I heard.. :surprise:

    Not sure, but if you have a SC driver's license, then you should be able to buy the car in NY without paying any sales tax, then just register it in SC, and pay the tax there...

    If you hold a NY driver's license, then you might be hard-pressed to claim SC residence for sales tax purposes... In that case, you might find it's worth it to buy the car in SC and avoid the chance of higher taxes.

    You might find it difficult to not pay sales taxes in NY, if you have a residence there, even if it's not your primary one... I'm definitely not an expert on that, though... Given that the tax difference between the states is likely in the thousands of dollars, I wouldn't take a chance.. Buy the car in SC!

    regards,
    kyfdx
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  • smithedsmithed Member Posts: 444
    SC does indeed cap sales tax on cars at $300. The way they get us is property tax on cars every year based on its perceived value. That $$$$ goes to the county and schools. One reason to keep a car for a good while: the property tax goes down as the vehicle depreciates. :)

    Buy it here if you have a residence in SC.
  • newcarsnewcars Member Posts: 103
    Thank you, everyone, for your replies. They have been helpful.

    Since my official residence is South Carolina, I am going to try and purchase the car without paying sales tax. And as the Nissan Altima Hybrid is not available in South Carolina, I must buy it in New York.

    I will let everyone know how it goes.
  • jjcooper0803jjcooper0803 Member Posts: 1
    I have kind of a different situation. My F I L lives in SC where my husband still has an account with a bank that will finance us. Also my F I L still has a car registered in my husbands name, so we have SC license plates. So if we buy a car in SC and register it there at his parents house with his plates, will we get away with paying the $300 cap on sales tax? Then when we register it after a year in CO, we actually have Disabled Vet plates that we can transfer to the new car which will cost us nothing also. Does this sound plausible?
  • tidestertidester Member Posts: 10,059
    Then when we register it after a year in CO...

    If you're living in CO, I believe the state requires that you register within 30 days.

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  • joel0622joel0622 Member Posts: 3,299
    Anytime you ask the question "will we get away with " You are rolling the dice. :D It could end up costing you 10X what the original tax in colorado would have cost you if you had done it the right way to start with.
  • thecore1234thecore1234 Member Posts: 1
    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 Member Posts: 3,425
    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 Member Posts: 2,918
    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 Member 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 Member Posts: 10,059
    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?

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  • euphoniumeuphonium Member Posts: 3,425
    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 Member Posts: 4
    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 Member Posts: 3,425
    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 Member Posts: 5,238
    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 Moderator Posts: 236,760
    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... :(

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  • 1stin101stin10 Member 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 Member Posts: 5,238
    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 Member 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 Member 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 Member Posts: 5,238
    If your buyers order shows the correct amount, the dealer is liable for the shortfall.
  • tidestertidester Member Posts: 10,059
    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.

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  • volvomaxvolvomax Member Posts: 5,238
    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 Member Posts: 10,059
    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 Member Posts: 3,425
    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 Member 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 Member Posts: 10,059
    Thanks for the followup. I'm glad you got that resolved!

    tidester, host
    SUVs and Smart Shopper
  • 1stin101stin10 Member 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 Member Posts: 5,238
    Congrats on the NC!
    I figured there had to be some local tax that wasn't being disclosed.
  • tallman1tallman1 Member 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 Member Posts: 3,425
    Makes buying in Oregon more attractive than King County, eh?

    What is your location's ST %? Mine is 7.7%
  • volvomaxvolvomax Member Posts: 5,238
    No tax in OR only works if you are a resident of that state.
  • euphoniumeuphonium Member Posts: 3,425
    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 Member 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.
  • sunpacersunpacer Member Posts: 1
    I found this for Georgia. Hope this helps.

    http://rules.sos.state.ga.us/docs/560/12/1/07.pdf
  • drivingmenutsdrivingmenuts Member Posts: 12
    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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