Vehicle Sales Tax Questions

seraan

Hi! I purchased a car from Maryland and I had a trade-in. I did not pay tax there. The car will be registered in New York, where I live. Did I make a mistake not paying tax there or I only pay where I register it? Do I pay on the full price or on the full price minus trade-in allowance? So many website tells me that I only pay tax where I register it but I called the tax place and almost got yelled that I did not paid tax in Maryland. Help! Thanks.

qbrozen

yes, you only pay where you register it. The only mistake is that, if your state gives a tax credit for trade-ins, you won't get that credit now. You will pay tax on the full purchase price.

The reason for a tax credit on trade-ins is because tax will be paid on the car you traded when it is sold by the dealer. Since you traded to Maryland, that state will get the tax when that car is sold, not NY. NY wants their tax money, so they've got to charge you for the full purchase price now.

That is my unprofessional assessment. I don't live in either state, so I could be wrong. But if I were a betting man, I'd go with that scenario.

british_rover

Sounds right. I doubt NY and Maryland have a reciprocal sales tax setup.

seraan

Thanks! This is what I thought. I assumed that I'm losing the credit for the trade-in, but I still did OK, and the truck I was getting (Tacoma X-runner) is sooo hard to find my area, I think they only make 3500 a year so I had not much choice but going out of State.

cccompson

Don't give up on that sales tax credit too soon. My state (Ohio) does allow such a credit on an out of state transaction (as I learned to my delight in '04 when I bought new in Kentucky).

jamie21

my husband is in the military and he bought a car in South Carolina where they did not charge him a sales tax becuase he was active military. now he and i are stationed in PA and we wanted to trade the car in for a different make..now my question is, do we get it tax free? and if not then why couldnt we just transfer the SC tag to this vehicle, would we have to pay taxes? the car would technically be registered in SC where we're tax free..

Kirstie_H

You can't register the vehicle in a state you don't live in. This practice is better known as tax evasion or fraud.

If you no longer reside in SC, you have to register (and pay taxes) in the state you now live in. Sorry for the bad news!

nj2pa2nc

we live in north carolina and recently bought a new car from a dealer in PA. We traded in our old car. When we registered the new car we paid tax on the amount after the trade-in. Maybe each state is different, I would check on that.

steve326a

In MA, you pay sales tax on either the price you paid or the book value which ever is higher. And MA does not recognize an out of state sale as a dealer sale so if you get a really cheap price for the car out of state, you will still get wacked the full book value sales tax. I know, it happened to me when I bought my 97 XLS in VA back in Oct.

Thanks,
Steve :shades:

bobst

That sounds fair to me. Since you will be driving on MA roads, MA should get money from you to maintain them.

seraan

Thank You for all the comments! I will let You know how much I paid when I register the car. I'm waiting from Maryland to send me the MSO (Statement of Origin), I need that for the registration. Thanks!

voxboy

My friend's Acura lease is about to expire and I want to buy his vehicle. But even if I accompany him to the dealership and plunk down the buy-out price, I'm guessing the dealer will want to register the car in his name and collect a sales tax. Does that mean that I'll have to pay a separate sales tax when I register the car in my name? How do I get around this?

tkim77

I am looking to sell sell my car and leasing a new one. I currently reside in Chicago but I will be moving to Scottsdale in a month.

What is the most cost efficient way to structure the two transactions?

icanfly

Say I purchase a Car that is worth 35,000 and my trade in is worth 23,000 dollars. Do I simply pay tax for 12,000 or for the purchase of the new vehicle (35,000). I searched on the california DMV site but couldnt come up with anything. It would really help if you could point me in the right direction, thanks.

fireball2

I am trying to buy a car for the wife in time for Christmas (tomorrow) but I am not sure on the tax thing. I work in California (where I would buy the car) and I live in BHC, Az. where I would be delivering it to Christmas day. Now they want to charge me tax at the dealer and then I would have to register it in Bullhead (home). I do not want to get to the MVD to register it and they tell me I have to pay az tax as well as the Ca. tax I have already payed...Could someone please advise on this. :confuse:

cccompson

AZ should give you credit on the tax paid in CA when you show them your receipt.

Keep us posted on this because CA should not charge you more than the AZ rate.

cccompson

Just call a couple of dealers, icanfly, they'll know. I'm searching my memory and can't recall whether CA offers the sales tax credit on new sales.

cccompson

If your friend buys out the lease, yes, he will pay sales tax. If he then sells it to you, you too would pay sales tax.

You'll have to run the numbers because, depending on the buy-out, this may still be cheaper than him turning it into the dealer and you then purchasing it yourself.

cccompson

tkim77, without knowing more about your situation (not to mention both IL and AZ tax law relative to leases), my guess is that you should sell your car before leaving Chicago and then lease when you get to AZ. This keeps things simple and avoids the necessity of transport.

Obviously, there are other factors here though. Maybe you want or need to drive to AZ. Perhaps your current vehicle is worth more (or less) in IL.

icanfly

Say I purchase a Car that is worth 35,000 and my trade in is worth 23,000 dollars. Do I simply pay tax for 12,000 or for the purchase of the new vehicle (35,000). I searched on the california DMV site but couldnt come up with anything. It would really help if you could point me in the right direction, thanks. I asked several dealers and they were all unsure! They told me to come down to see the cars first. If someone could help me I would really really appreciate it.

jkandell

I looked at the AZ DMV site, and if my interpretation is correct it costs so much more for registration in Arizona relative to other states that I am wondering whether I'm interpreting this correctly.

The part that is confusing me is the VLT, http://www.dmv.org/az-arizona/car-registration.php: "The variable fee comes in the form of the vehicle license tax (VLT), which is assessed instead of the personal property tax that many other states charge. It is based on the manufacturer's base retail price of the automobile, but takes into account amortization, so you will pay a little less to register your vehicle each year."

Tell me if I'm doing this correctly. On a new $13,850 msrp Honda Fit (excluding the $595 delivery), the registration fees would be mandatory: $4+$8+$1.50 for title/reg/alt energy, then a VLT of 60% of $14445 divided by 100 times $2.80 = $246.18.

Can someone from Arizona verify that I'm interpreting the dmv site correctly? Since sales tax here is relatively high (7.8-8.2%), and doc fees are high here ($270-$370), this means everyone is paying something like 12% above msrp just for registration and taxes?">link title

jkandell

I didn't get a response to my previous post, so let me reword it in simpler form: Are auto prices in Arizona going to be several hundred dollars higher because registration costs more than other states? We use a VAT car tax instead of personal property tax, so registration for a new car is $2.80 times 6% of msrp. Of course buyers in other states are paying roughly this amount later at tax time, but it won't be reflected in the sales price. Or am I missing something?

kyfdx

In my state (KY), we have a personal property tax.. Paid annually.. Locally, it runs about 1.5% of MSRP, and goes down slightly each year, as the car depreciates..

I don't really see how that materially differs from AZ, or other states that have property taxes..

Some states cap the sales tax at $300, if you really want to make yourself feel bad in comparison..

nj2pa2nc

i do not live in CA but in NC you would pay the tax on the $12,000. I do not know why the dealers can not give you an answer. did you try calling the dmv. I am sorry I can not be more helpful

hd_atlanta

Replying to: atlantareb (Oct 20, 2006 6:11 pm)
I'm replying to myself since I finally have an answer about sales tax on used vehicles in Georgia. I recieved the following in a letter from the GA Department of Revenue: "Under Georgia law, when a vehicle is titled in a company or business name, it is an asset of that company and when it is sold or transferred, it becomes tangible property and is taxable. The only time a vehicle purchase is not taxable, is if it is titled in an individual's name only." So this feature of the law just cost me an additional $1000 on a $15,000 vehicle. If you are a buyer of a used vehicle in GA, make sure that the name on the title is not a corporation or company. If it is, you will be billed for the sales tax a couple of weeks after you have registered the vehicle. But, at least in Georgia anyway, we can still buy a vehicle, sales-tax free, if the owner is an individual. Too bad, I learned this too late.

Whom did you contact in the Georgia government? Which department? Did you contact them by email, or by postal letter? I'm new to Georgia, and want to have an official response in-hand when I purchase my car. Can you possibly forward me the response they sent you?

Thanks!
:confuse:

lexiedriver

I purchased a vehicle in June 2006 while living in Hawaii for $28K. I traded in a vehicle that was worth $17K and paid $11k cash. The Dealer in Hawaii charged me sales tax only on the $11k which came to $440
In Dec 2006 we had to move to California, I went in to register the car at the DMV and was charged sales tax on the $28k .. $2170 and they deducted the $440 I already paid in Hawaii.
I understand that the california 12 month rule was setup to discourage people from purchasing out of state vehicles to try and avoid paying sales tax but this was not our plan since the company I work for required me to relocate.

Did the Hawaii dealer make a mistake and not charge me tax for the full price? Can I get an exemption from California since my plan was not to avoid sales tax? Had I known this, I would have either left the car at someone's house in Hawaii until June and then shipped it after the 12 months were up or left the car in my garage in california until June.

cccompson

Hawaii merely gave you a tax credit on the value of your trade. California's 12 month rule does have some exceptions although I don't know the ins and outs. Take a look at the state website and you should be able to find the particulars.

krulldaddy

Give this site a try: www.boe.ca.gov/sutax/faqtrans.htm

I'm having the same issue. California wants to tax you basically regardless of your trade-in value from what I gather at this link. Take care!

lexiedriver

Is it possible to "undo" a car registration at the DMV? Just tell them we decided not to register it and want our money back. Then stick it in a garage until the 12 months are up?

cccompson

Don't know for sure but highly doubt it. I work for a government agency and once you pay, it's a done deal on just about anything. Ask 'em - the worst they can say is no.

steve326a

Well it's like this. If you register a vehicle in MA today then you change your mind tomorrow, the registry will cheerfully accept your plates back and even give you a free return receipt. They will not refund your registration fee or sales tax. And if the next day you say oops, I changed my mind again, I want it registered after all, you pay the reg fee all over again. To boot, you need the return receipt to cancel your insurance or else they won't cancel it and make you keep paying for it. Also, without it, you will keep paying excise tax every year. I had a vehicle that the plates expired 3 yrs ago and just kept it parked. I was still forced to pay 3 yrs of excise tax until the plates were returned even though they were expired. And you have no recourse of any kind. They can do as they please and you have to suck it up and like it too. I voiced my dismay of the policy. They almost had me locked up for arguing with them. Ahhh Government. They've gained too much power since 9/11.

Steve
** 97 XLS w/ All The Toys **
** My Baby! **
** Enjoy & Long Live Your Avalon! **
** I'm Enjoying Mine! **

putnamcs

I have read the entries on this forum, but have met with differing information from the California dealer from whom I intend to purchase the car. I am being told that I will be required to pay CA tax and registration upon purchase of this used car. I am told that I can then transfer the registration upon my return to Utah (11 hours later). Do I really have to pay CA tax on a car that will be used in Utah, and do I really have to register it in CA to only drive it there for 11 hours. Please advise.

shasta67

I don't know the answer to this but I bet you could look up a dealer in Yreka or Mount Shasta California and they could give you the answer. They are both very close to Oregon and because Oregon does not have a sales tax they would have come across this problem. I am guessing that California may have an exception for out of state buyers but as greedy as we are you never know.

kyfdx

I can't tell you what will happen when you get back to Utah, but I do know that if you take delivery of a new car in California, the dealer is required to collect California sales tax.

The only way around that, is for the dealer to physically deliver the car out of state.

I don't have any info on reciprocity between the two states, and whether Utah will credit you for the CA sales tax already paid. You might check here for specific information: Utah DMV

regards,
kyfdx

dj33

If I get a vehicle (perhaps out of state) and register it here and state it was given to me by my cousin. Will I have to pay use tax? Or what would I put in the statement of facts that it lists on the CA DMV website? Or in another situation what if I put the value half of what it is will I be taxed later on? Just wondering.

shasta67

A friend of mine was given a car by another friend of his. The DMV tried to charge his sales tax based on the book value of the car but his girlfriend stood her ground the the DMV ended up not charging any sales tax. There are exceptions to the sales tax issue if it is between a close family member but I don't think a cousin counts.

Ok to your last question. It is a common knowledge that hardly anyone pays the full sales tax on a car they buy from a private party. When the person who sells the car releases liability, he puts what he sold the car for on the form. In most cases (hypothetically speaking of course) you could just ask him to put the amount you want him to. Really it does not mean much to the seller. Yes there are some liability issues with being less than honest. You just have to weigh out if it worth it to you. I have a problem with the State collecting sales tax on a new car and then recollecting it again every time it changes ownership.

fms2

Had to walk out of a Honda dealership in Northern Va near the Landmark shopping center. They insisted that I pay a DC excise tax of 6.2 percent when the tax rate is 6 percent. I noticed that they were charging VA residents 3.2 percent when that rate is actually 3. I believe that if they collect 6.2 percent from the customer on a contract line item that calls itself tax and then proceed to pay only the 6 or the 3 to DC or VA that they are committing a felony. Any victims of this felony out there?

bobst

A few years ago, the NOVA dealers charged 3% for state tax and .125% for Fairfax County tax, for a total of 3.125%.

I would not be surprised if the county tax has increased to .2%, for a total of 3.2%.

I don't know what the DC tax rate is.

grutza

Alexandria, VA where the dealership is located charges 3.2 combined. That includes city and state.

albert5

If i wil purchase a $35,000.00 worth of car in oregon in bring it to washington state, how much tax will i have to pay if the car gets into washington state? And how this process works?

Please let me know. I really aprreciate it.

Thank you.

kyfdx

I don't know what the tax rate is on cars in Washington state (9.2%?), but you'll have to pay the same amount when you register it, no matter where you bought it.. Just because Oregon doesn't charge sales tax, doesn't mean you can get out of paying it, by purchasing a car there.

If you are rolling the tax amount into a loan, then the dealer should give you a check for the amount of tax you will owe, that you can use to pay the taxes.

I would guess that the Oregon dealers are familiar with Washington buyers, and could give you some guidance in the matter.

regards,
kyfdx

albert5

Yes, its 9.2%.

Thank you for the info.

albert5

I just got a qoute from a dealer for '07 TL base w/o navi. for $ 32,476.00 w/ protection package +tax & license.
Is this a good deal?

Kirstie_H

Try posting here:
Acura TL: Prices Paid & Buying Experiences

treacherous

In WA state you will pay your local sales tax rate + 0.3%.

The additional 0.3% amount is added for car sales.

You can find your local rate here if you aren't sure.

http://gis.dor.wa.gov/taxratefinder/TaxFinder.htm?TaxType=S

ekkirkpatrick

I have tried to reply to you numerous times, but it doesn't seem to be working?!? Quick answr is yes you will have to pay tax. I went through a similar thing a year ago. I had to come up with 7% on a $22000.00 Jeep I bought and financed in New Hampshire.

tidester

I have tried to reply to you numerous times ...

I am glad you were finally able to figure it out!

Incidentally, the person to whom you replied posted his message a year ago and has likely found the answer by now. However, I'm sure others will be able to make use of the information you provided.

tidester, host

carashea

Hi there-

I am a resident of WY looking to buy a used car in CA. I vaguely recall something about a 7-day permit that allows you a grace period to get the car back to your home state....but I can't seem to find anything on that. (The CA DMV website seems devoid of info about buying a car in CA when you're not a CA resident!)

What is the rule for paying sales tax when buying in CA (8.75%) when I am a resident of WY, which is also where the car will stay (6%)?

thanks!

bigk77

I would like to purchase a used car from a private party. I realize that the private party does not collect sales tax, but when I register the used car will I have to pay it then? I never understand how states can collect sales tax as many times as they want on the same item. I just moved to AZ and don't know the laws. Thanks!

bobst

As I understand it, some states collect a fee when a car is registered to drive in their state. Since the state needs to provide roads for the car to drive on, I think collecting a fee is reasonable.

We bought a car once in Florida and paid the sales tax. When we moved to Maryland, we had to pay a 3% fee (based on the blue book value) to register the car.

However, when we moved to Virginia, we only had to pay a very small fee to register our car.

Each state has its own laws.