Vehicle Sales Tax Questions

volvomax

As an Oregon resident, you would not pay the 5.6% AZ state tax.
What you would be liable for is any city and county tax.
FAIK, there is no refund for this from Oregon.

samiam10

Thank you.

revznet

You know he said you have to pay the City or County tax which is about 7% of the car. You would always need to pay sales tax in the state you purchase when driving the car out of that state. if you are trucking the car out of the purchasing state, it would be tax exempt in the purchasing state. You would still be liable of the use tax in your home state.

volvomax

Actually, in most places city and county is only 2% or so.

cccompson

Don't paint with such a broad brush. While it may make a difference in some states, whether a vehicle is driven or shipped has nothing to do with tax liability in many others.

dlynch

Here is the situation:
1 - I leased a 2008 Toyota from Toyota Financial Services
2 - My son totaled the vehicle. Fortunately he is ok, unfortunately he was not covered under our insurance policy.
3 - I had to buy the vehicle from TFS for $25,0000 to clear the lease.
4 - I will sell the vehicle to the salvage yard for $1,000.
5 - I live in PA and in order to transfer the vehicle to the salvage yard, I have to give them the title.
6 - Does anyone know if I would have to pay PA sale tax on the $25k purchase price of the vehicle?

Any thoughts are appreciated.

qbrozen

does this vary by state? I know here in NJ, my car is covered by my insurance no matter who is driving.
I mean, otherwise, what would they do in the event of theft? "Hey, you were driving when the thief drove your car off the bridge. Too bad!"

volvomax

FAIK, you will have to pay the tax on the buyout.

ncosper

I am wondering what the tax rate would be on the registration of the vehicle in Arizona when purchased from a dealer out of state.
More specifically do you pay or are you required to register the vehicle in the city or county you live in? Or do you automatically pay that tax rate. Meaning, say I live in Phoenix and my tax rate is approx 8%. This includes city, county and state sales tax. Can I register my vehicle in Tuba City that has the state sales tax and a small county sales tax with no city sales tax making it just over 6%, saving the difference? It seems to me that this is the case, but I can't seem to get an answer from anyone over the phone.
Thanks

mio4321

I just recently moved to Boston, MA. Just before I moved here I purchased a car in NY, had it registered and insured in NY. Now I am converting all my stuff over from NY to MA and the RMV is telling me I have to pay MA sales tax on my car. I already paid the NY sales tax. But the RMV is telling me since I haven't owned the car for 6 months I have to pay sales tax again. Is there anything I can do to avoid this and can MA legally charge me sales tax again since the amount I paid in NY is greater than what I would be charged in MA?

volvomax

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.

kumars4

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?

tidester

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

slhouse1

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:

volvomax

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.

slhouse1

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?

slhouse1

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:

kyfdx

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

slhouse1

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.

kyfdx

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..

volvomax

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.

slhouse1

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.

euphonium

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.

kyfdx

Oregon and New Hampshire have no sales tax..

South Carolina is capped at $300..

volvomax

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.

tidester

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

volvomax

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!

tidester

And you stand a chance of having it taxed a third time if you bequeath it to your children because of inheritance taxes!

tidester, host
SUVs and Smart Shopper

volvomax

Yup. You just gotta love the Democrats. :sick:

Kirstie_H

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.

euphonium

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.

cccompson

LOL - "lives on the dole"

What, like the banks and the defense industry?

kyfdx

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:

euphonium

""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:

kyfdx

"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).

euphonium

""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.

tidester

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.

tidester, host
SUVs and Smart Shopper

lokki

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.

tallman1

I'm guessing that you forgot to supply the link.

lokki

http://www.dot.state.tx.us/drivers_vehicles/vehicle_titles/std_presumptive_value- .htm

Oh Dear!

spk55

I live in Los Angeles, where the sales tax is about to go up to 10% on April 1st. It is currently 8.25%. Does anyone know if the sales tax on my lease will go up if I close the deal by the end of March?

euphonium

If the lessor buys before April Fools Day, the ST is whatever is in effect at the time of that purchase.

volvomax

If you pay tax on the payment each month, then your tax rate will go up.

kyfdx

Yup.. I can't see how it would be any other way...

euphonium

Wasn't the ST paid by the Lessor before 1 April 8.25%? Thus his cost of leasing is based on 8.25% because the Lessor bought and paid for the car before 1 April.

How does it work out the Lessee has to pay 10% after 1 April?

tidester

I believe the customer is responsible for the sales tax so the lessor would not have paid it. Otherwise, it would be similar to a dealership paying sales tax for "buying" from the manufacturer. Perhaps one of the salespeople can help us out on this one?

tidester, host
SUVs and Smart Shopper

kyfdx

No... the lessor doesn't pay the sales tax in advance in California, even though they purchase the car.. Since they aren't the end user, they don't pay the tax.

The tax is collected monthly on the rental of the car. When the tax rate goes up, the lease payment will reflect that.

Of course, other states that do collect the tax upfront will have different rules.

regards,
kyfdx
visiting host

volvomax

Bingo!

spingrinder

Sorry if this has been asked before - searched and could not find anything.

I'm in California - Wells Fargo lease is sticking me with a disposition (turn in) fee and I have some mileage overage. They are also claiming that they are required to add sales tax on both the disposition fee and the mileage fee. Anyone know if that is correct?

Thanks.

kyfdx

Any money paid on a lease that doesn't go directly to the government (title/registration fees,etc) is usually taxable.

This includes money paid upfront, and on the back end...

regards,
kyfdx
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