Vehicle Sales Tax Questions

kage4307

you pay tax on the price on the back of the title, whatever you and whoever is selling it agree on minus taxes, i'm sure you could ask them what price they'll be putting on the title

pefred

In 2012, the GA Legislature passed a bill, a part of which eliminated a really great part that stated that, and I paraphrase here, "people who buy used cars from individuals do not have to pay sales tax". The new law treats individual and dealer purchases the same. However, although the law was effective on 01/01/13, portions of the law don't go into effect until 03/01/13. However, I have not been able to figure out if the individual used car sales tax portion went into effect on January 1, or goes into effect on March 1.

So, here's my question for anybody who knows the new law. I'm planning on selling one of my cars between now January 7 and March 1 on AutoTrader as an individual. If I sell the care prior to 03/01/13, does the buyer have to pay any sales tax. Any help would be appreciated.

karenagrx

I purchased a vehicle from my daughter, is there sales tax on family member to family member purchases in ohio ?

cp9974

I have searched the web extensively and these forums but I can't find a definitive answer regarding purchasing in AZ as an out-of-state resident driving it back to my MN where I reside. I have actually read conflicting things about AZ in particular.

The dealership quoted me with a city tax.

Can someone please advise?
Thanks.

igozoomzoom

Here is the info on the topic on the Arizona Dept of Revenue site-

http://www.azdor.gov/Business/TransactionPrivilegeTax/MotorVehicleSales.aspx

If it becomes too much of a nightmare, is it absolutely essential that you buy the car in AZ? Or can you return to MN and buy it instead?

glayfan40

Hi,

I've purchased a new vehicle back in Jan of this year and paid the MA sales tax ($1500 and change). I've since sold the vehicle in June to a dealership. Am I entitled to a partial refund of the sales tax I paid originally?

Thanks!

embroidthis

I took over a lease from an individual in Orth Carolina , I live in Illinois , went to get plates today and the DMV said I had to pay sales tax on the original purchas price even though there is only 9months left on the original 36 month lease. So I would be paying $2600.00 so I can drive for 9months . Seem to be a very unjust law. My question is since this is least to my company can I register it in nearby Wisconsin where they appear to understand what a lease is and how they work. What is the legal penalties for doing so, if the fine is less than the tax, I'm thinking of doing it that way.

thegrey

I have a question: if I were to move to MD (6% tax on cap price of entire car) with a lease in progress, and I were previously leasing in PA (10% tax on payments) - would I have to pay the difference in the taxes backdating from when the car was initially leased?

joe131

Leased a Hyundai in Peoria AZ where tax is 8.1% so that tax was added to the lease base monthly payment. But a couple weeks later, Hyundai Motor Finance sent me a letter showing a higher monthly payment based on the sales tax in the city where the car would be parked overnight instead of the city of the dealership. Dealer should have known that in AZ, tax on a car sale is based on point of sale but tax charged on a lease is based on city where car will be parked at night (the term used by HMF is "garaging" address).

kyfdx

joe131 said:

Leased a Hyundai in Peoria AZ where tax is 8.1% so that tax was added to the lease base monthly payment. But a couple weeks later, Hyundai Motor Finance sent me a letter showing a higher monthly payment based on the sales tax in the city where the car would be parked overnight instead of the city of the dealership. Dealer should have known that in AZ, tax on a car sale is based on point of sale but tax charged on a lease is based on city where car will be parked at night (the term used by HMF is "garaging" address).

That's unfortunate, but not sure there is anything you can do.

lilredjetdiwag

Planning on purchasing a car in CA and register in TX. CA sales tax is higher and from what I understand, since I'm planning to drive it back (taking delivery at the CA dealership), I have to pay CA sales tax (@8.5% or so). Since TX sales tax is only 6.25%, how do I get additional tax additional amount that was paid to CA during registration? Thanks!

Michaell

lilredjetdiwag said:

Planning on purchasing a car in CA and register in TX. CA sales tax is higher and from what I understand, since I'm planning to drive it back (taking delivery at the CA dealership), I have to pay CA sales tax (@8.5% or so). Since TX sales tax is only 6.25%, how do I get additional tax additional amount that was paid to CA during registration? Thanks!

You will be registering your car at the TX address?

You should be able to get a refund of the entire CA tax, then pay the 6.25% when you register the car in TX.

Check the CA department of revenue website; there ought to be some instructions on how to get a refund.

stever

Not sure how true it is, but I've heard that some dealers will deliver cars to people to the state line so they can take possession in Nevada or Arizona and avoid California tax. Since you're planning a road trip anyway, it may be worth asking about and flying into some place like Reno or Vegas instead.

I asked that question at a Chevy dealer in San Diego last month and they didn't have a clue. Or we can ask @kyfdx.

kyfdx

I'm pretty sure if you buy and take delivery of a car in CA, you'll pay CA sales tax. And, they won't be refunding it.

It's possible that Texas would credit you for CA taxes paid, if they have a reciprocal agreement, but given the distance, that seems unlikely. Check with the Texas DMV.

The higher CA sales tax rate will be the least of your problems, if it turns out you have to pay sales tax in both states, to register the vehicle.

See what Steve says about asking them to delivery it across the state line.

Michaell

lilredjetdiwag said:

Planning on purchasing a car in CA and register in TX. CA sales tax is higher and from what I understand, since I'm planning to drive it back (taking delivery at the CA dealership), I have to pay CA sales tax (@8.5% or so). Since TX sales tax is only 6.25%, how do I get additional tax additional amount that was paid to CA during registration? Thanks!

One last question - are you doing this for convenience or is it because CA is the only place where you can get the car you want? Lots of dealers in Texas - I find it hard to believe none of them have what you want.

turboxchaz

Sorry to resurrect an old thread.

Leasing a car in CA (, registering in WA (10.3%)

Is Lease Cash AKA Manufacturer-to-Dealer Incentive taxable? If so, at which state's rate? (I think it's WA)

Michaell

turboxchaz said:

Sorry to resurrect an old thread.

Leasing a car in CA (, registering in WA (10.3%)

Is Lease Cash AKA Manufacturer-to-Dealer Incentive taxable? If so, at which state's rate? (I think it's WA)

If it's a dealer incentive, it simply reduces the selling price, and isn't taxable.

Customer incentives are taxable, however.

turboxchaz

Michaell said:

turboxchaz said:

Sorry to resurrect an old thread.

Leasing a car in CA (, registering in WA (10.3%)

Is Lease Cash AKA Manufacturer-to-Dealer Incentive taxable? If so, at which state's rate? (I think it's WA)

If it's a dealer incentive, it simply reduces the selling price, and isn't taxable.

Customer incentives are taxable, however.

Just confirming, and to be specific, lease cash for a Kia Stinger is dealer incentive, correct? Whilst waiting for a reply, I've attempted to research various sites that all say conflicting things that say it depends what state (tax rules), while the Edmunds "What New Car Fees Should You Pay?" says otherwise...

kyfdx

turboxchaz said:

Michaell said:

turboxchaz said:

Sorry to resurrect an old thread.

Leasing a car in CA (, registering in WA (10.3%)

Is Lease Cash AKA Manufacturer-to-Dealer Incentive taxable? If so, at which state's rate? (I think it's WA)

If it's a dealer incentive, it simply reduces the selling price, and isn't taxable.

Customer incentives are taxable, however.

Just confirming, and to be specific, lease cash for a Kia Stinger is dealer incentive, correct? Whilst waiting for a reply, I've attempted to research various sites that all say conflicting things that say it depends what state (tax rules), while the Edmunds "What New Car Fees Should You Pay?" says otherwise...

Kia lease cash is a customer incentive.

That amount is applied as a CAP cost reduction, and taxed upfront. Of course, that amount can be rolled into the CAP cost.

I would think on a lease deal, that all sales tax will be in your home state. But, CA has some restrictions on tax, if the vehicle is delivered in CA. I still can't imagine the upfront tax going to CA, but the monthly tax being applied in WA. I'm pretty sure that everything will be WA tax.

turboxchaz

kyfdx said:

turboxchaz said:

Michaell said:

turboxchaz said:

Sorry to resurrect an old thread.

Leasing a car in CA (, registering in WA (10.3%)

Is Lease Cash AKA Manufacturer-to-Dealer Incentive taxable? If so, at which state's rate? (I think it's WA)

If it's a dealer incentive, it simply reduces the selling price, and isn't taxable.

Customer incentives are taxable, however.

Just confirming, and to be specific, lease cash for a Kia Stinger is dealer incentive, correct? Whilst waiting for a reply, I've attempted to research various sites that all say conflicting things that say it depends what state (tax rules), while the Edmunds "What New Car Fees Should You Pay?" says otherwise...

Kia lease cash is a customer incentive.

That amount is applied as a CAP cost reduction, and taxed upfront. Of course, that amount can be rolled into the CAP cost.

I would think on a lease deal, that all sales tax will be in your home state. But, CA has some restrictions on tax, if the vehicle is delivered in CA. I still can't imagine the upfront tax going to CA, but the monthly tax being applied in WA. I'm pretty sure that everything will be WA tax.

That's unfortunate to hear. I've been banking on the idea that the lease cash you guys provide on the Stinger thread was manufacturer-to-dealer incentives.

I would imagine, regardless of the tax scenario, that my local DMV (DOL in WA) would be able to reconcile the difference during titling. Unless if you're concerned that CA would keep the tax paid upfront. If anything, I suppose I could contact the CA tax agency.

kyfdx

turboxchaz said:

kyfdx said:

turboxchaz said:

Michaell said:

turboxchaz said:

Sorry to resurrect an old thread.

Leasing a car in CA (, registering in WA (10.3%)

Is Lease Cash AKA Manufacturer-to-Dealer Incentive taxable? If so, at which state's rate? (I think it's WA)

If it's a dealer incentive, it simply reduces the selling price, and isn't taxable.

Customer incentives are taxable, however.

Just confirming, and to be specific, lease cash for a Kia Stinger is dealer incentive, correct? Whilst waiting for a reply, I've attempted to research various sites that all say conflicting things that say it depends what state (tax rules), while the Edmunds "What New Car Fees Should You Pay?" says otherwise...

Kia lease cash is a customer incentive.

That amount is applied as a CAP cost reduction, and taxed upfront. Of course, that amount can be rolled into the CAP cost.

I would think on a lease deal, that all sales tax will be in your home state. But, CA has some restrictions on tax, if the vehicle is delivered in CA. I still can't imagine the upfront tax going to CA, but the monthly tax being applied in WA. I'm pretty sure that everything will be WA tax.

That's unfortunate to hear. I've been banking on the idea that the lease cash you guys provide on the Stinger thread was manufacturer-to-dealer incentives.

I would imagine, regardless of the tax scenario, that my local DMV (DOL in WA) would be able to reconcile the difference during titling. Unless if you're concerned that CA would keep the tax paid upfront. If anything, I suppose I could contact the CA tax agency.

If you are leasing, the bank will take care of all of that.

weiskittelk1

kyfdx said:

Yes.. that is my understanding of reciprocity also... That the state allows you to buy the car WITHOUT paying sales tax, then you pay it in your home state..

Sales tax in Kentucky used to be a LOT more than Ohio... And all the dealerships in KY near the state line would advertise: "If you do not live in Kentucky, you do not pay Kentucky sales tax".

Sorry to reopen an old thread! I am currently living in Northern KY and looking to lease a car from Ohio. Do you know if there is reciprocity in the opposite way- not paying taxes in Ohio for the car living in KY? I ask because I got SCREWED when I moved mid-lease to KY from OH. I had already paid the OH taxes upfront and the KY taxes were added monthly. So essentially I've been paying two years of double taxes on the same lease. I called both Honda Financial, who my lease is from, and the Kentucky Department of Revenue and each claimed I needed to contact the other entity. It was a mess and extremely frustrating. Is there a way to avoid this upfront this time around?

kyfdx

weiskittelk1 said:

kyfdx said:

Yes.. that is my understanding of reciprocity also... That the state allows you to buy the car WITHOUT paying sales tax, then you pay it in your home state..

Sales tax in Kentucky used to be a LOT more than Ohio... And all the dealerships in KY near the state line would advertise: "If you do not live in Kentucky, you do not pay Kentucky sales tax".

Sorry to reopen an old thread! I am currently living in Northern KY and looking to lease a car from Ohio. Do you know if there is reciprocity in the opposite way- not paying taxes in Ohio for the car living in KY? I ask because I got SCREWED when I moved mid-lease to KY from OH. I had already paid the OH taxes upfront and the KY taxes were added monthly. So essentially I've been paying two years of double taxes on the same lease. I called both Honda Financial, who my lease is from, and the Kentucky Department of Revenue and each claimed I needed to contact the other entity. It was a mess and extremely frustrating. Is there a way to avoid this upfront this time around?

If you are a KY resident, you don't pay Ohio sales tax, at all.

Technically, and counter to my previous post, there is no reciprocity.
And, yes, when you move from an upfront tax state to a monthly tax state, you take it in the shorts.

But, that won't be an issue, in this case. I live in NKY, as well, and I've bought/leased all my vehicles in Ohio. No issues.