Vehicle Sales Tax Questions

tango2201

If I purchase a car from another state do I have to pay for the state tax? Either my state or the state which I am purchasing the car from. Thanks.

anonymousposts

California also has some of the highest taxes and fees in the country. Not to mention the wait time for paperwork. In my professional opinion (I do have 5 years experience working for a high volume dealership) it would save everyone time and hassle if you just waited to buy the car where you would register it.

mugglywump

My dealer has given me a purchase price including destination fee, but excluding his charges for title & doc prep. He tells me that title & doc prep are not taxable, but dest. fee is, as it is bundled in the purchase price. My DMV & State Tax Div tell me that dest fee is NOT taxable, if it is separated from the purchase price. My dealer seems unwilling to do that - it must impact his final profit somehow. The tax/title forms from the state ask for "gross purchase price" less deductions, which might be a trade-in, but I do not have one. I want him to list dest. fee as a deduction, leaving a net purchase amount to calculate taxes on. Dealer (huge luxury dealership) says this is first he's ever heard of this. I am paying my own taxes as I have to go to the DMV anyway to get new plates. I guess the dealer usually forwards the tax payments for its buyers. I think dealer is either pocketing the tax on the dest. fee (in my case about $50) or even WORSE, overpaying the state. Has anyone else encountered this? What should I do? Thanks!

kyfdx

Destination fee is part of the price of the car.... In most dealerships, the only place it is broken out is on the MSRP and the invoice... It usually isn't even listed separately on the sales contract...

Ergo: Taxable... at least in every state I've been in...

regards,
kyfdx

okan

I currently live in MD, and moving to CA soon. I was wondering how the registration transfer for my car works. What documents I need, do I need to have the car inspected (there is a 4 inch crack in windshield, would that be an issue), do I pay taxes, etc. I looked on the web but everything I found is on transferring a title within CA.

On a related note, I have a commercial class BM licence (M for motorcycles). I want to get the same licence in CA. Any idea what I need to do? Only the written exam, or driving exam, or both?

Thanks a lot.

rgillgrist

While on a business trip in Minnesota I purchased a car from a private seller. My home state is WA. Which state do I pay sales tax for the transaction?

Kirstie_H

You generally pay sales tax where you register the vehicle.

sarah5

I've seen several other similar questions on this board, but none of them seem to have been answered...

Does anyone know the ins-and-outs of gifting a car in NJ? Or any repercussions for selling it below book value?

jennifer9

You are liable for the remainer of the amount they sell it for if you pd 12,000 and they resold it for 8,000 you are liable for the other 4,000

jennifer9

If I buy a new vehicle in my company's name, I'm a used car dealer. Am I still liable for the sales tax because its a new vehicle? :confuse: :

fisher54188

:confuse:

I read through the whole thread, it's very very helpful!
However, I'm facing a complicated situation. I have Maryland driver license, living in PA but working in California. Is that possible to lease a car in California and the dealer helps me register in Maryland? If so, how do I determine the tax rate?
Thanks in advance!

jskovner

A used car dealer in CA tells me that I must pay CA sales tax. I am a resident of UT. I thought that I could pay state sales tax in my state of residence. Who is correct?

kyfdx

I'm pretty sure that CA requires that tax be collected on any sale within the state.. That is why car dealers there will drive a car over the state line to make a delivery... resulting in no CA tax due..

regards,
kyfdx
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skoontz

Hello,

I'm working a lease deal on a 2006 BMW 530i. In Texas (I live in Austin), sales tax must be paid on the full selling price. So, I'm trying to figure out if I pay the taxes in full at inception or roll them into the capitalized cost.

The deal looks like this:

2006 BMW 530i
MSRP $53,465
Sales Price $51,500
Acq Fee $825
Sales Tax (6.25%) $3223
Sec Dep $700
Residual 62%
MF .00215
36 months; 12K miles/year

Lease payment is ~$690/month

So...

1) Does this look like a good deal?
2) How have others in Texas handled sales tax on a lease?

Many thanks in advance,
Sean

eosman

I live in Alabama, and am buying a used car in Dallas, TX from a private seller this weekend. It is an expensive sports car, a Porsche Boxster. I've already arranged for financing with quite a bit of downpayment of my own. My question is, since I'm buying from an individual and not a dealer, do I still pay a sales tax? And where do I pay sales tax? Do I pay it here in Alabama?

I guess I'm wondering, since I buy used stuff all the time on ebay, but was told a car is different, sales tax is continually paid over the life of a vehicle as it's being bought and sold. Sorry if this is a no-brainer question, but I really don't know.

eosman

I live in Alabama, and am buying a used car in Dallas, TX from a private seller this weekend. It is an expensive sports car, a Porsche Boxster. I've already arranged for financing with quite a bit of downpayment of my own. My question is, since I'm buying from an individual and not a dealer, do I still pay a sales tax? And where do I pay sales tax? Do I pay it here in Alabama? Do I need an offical bill of sale form? Or any receipt will do?

I guess I'm wondering, since I buy used stuff all the time on ebay, but was told a car is different, sales tax is continually paid over the life of a vehicle as it's being bought and sold. Sorry if this is a no-brainer question, but I really don't know.

troytn

I live in TN and have a deal worked out to Lease an Acura TL in NC. Tn sales tax is 9% and NC is 3%. The dealership told me the lease payment is figured on the NC sales tax and I would register it and get tags in TN. Is this correct? I'm afraid I sign a 3 year lease with the NC sales tax in the lease agreement with Honda and can they change it once I register the car?

Basically once I sign the lease agreement for a certain payment can anyone go in from TN and raise it even though I did not lease it in TN I only live there?

Thanks

Troy

kyfdx

I'm almost positive that you will have to pay the sales tax on the lease where you register the car.... I think your dealer in NC is wrong..

Here is a post from one of our members, who lives in TN, and has leased a few cars out of state.. Hopefully, it will help...

Tennessee leasing post

regards,
kyfdx
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troytn

Thank you sir..So basically I should get the car in NC and it should have zero sales tax on it as well as zero title fee's and then I will title it in Tn and pay TN sales tax. Is this correct?

The dealer did tell me he will give me a temp window tag but I will have to double check with him on the tax part. I do not want to pay NC sales tax and also TN sales tax.

Thanks

Troy

kyfdx

I agree... You definitely don't want to pay taxes twice, and you shouldn't have to....

I think I'd make a call to Honda Finance, and talk with someone that processes leases for Tennessee... They should know exactly what is involved.. I wouldn't think that you would be paying any NC taxes, at all...

This is another good reasons to roll the taxes into your lease payment... After all, it is Honda Finance that pays the taxes... you are just reimbursing them..

regards,
kyfdx
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czar240

I am less knowledgeable than crjdriver. It has been years since I last purchased a car from an individual. Is it true that in Georgia the purchase of a vehicle from a private party does not require payment of Georgia sales tax? Does the state determine whether the car was purchased from a private party or dealer by reviewing the Bill of Sale?

gale2

I lived in New york state in july 2003, leased a vehicle for 48 months in New Jersey, dealer collected 48 months tax up front and claims they paid it all to New York State, 27 months into lease, I moved to NJ.
Now state of New Jersey wants to charge me 6 percent tax on each monthly lease payment for next 21 months.even though I already paid $1200. upfront on the lease to NY State thru dealer, now dealer is invoicing me another $600 for State of NJ. Can I get refund from NY for the 21months I am not NOT living in NY but have paid for those months???

anonymousposts

Georgia dealers are obligated to charge Georgia customers state sales tax. However, if you purchase the vehicle from a private owner you are NOT responsible for sales tax.

You may want to take a copy of the bill of sale (along with the title) with you to get the vehicle registered.

bobst

Every time I hear about taxes, I think of the lyrics to this Beatles song from their Rubber Sole album.

Let me tell you how it will be
There's one for you, nineteen for me
'Cause I'm the taxman, yeah, I'm the taxman

Should five per cent appear too small
Be thankful I don't take it all
'Cause I'm the taxman, yeah I'm the taxman

If you drive a car, I'll tax the street,
If you try to sit, I'll tax your seat.
If you get too cold I'll tax the heat,
If you take a walk, I'll tax your feet.

Don't ask me what I want it for
If you don't want to pay some more
'Cause I'm the taxman, yeah, I'm the taxman

Now my advice for those who die
Declare the pennies on your eyes
'Cause I'm the taxman, yeah, I'm the taxman
And you're working for no one but me.

leim

Anyone know if Colorado has sales tax deduction for trade-in? Do I pay tax based on original full price of the car, or on net payment (full price minus trade-in)?

Thanks in advance.

danf1

Colorado taxes on the money difference, so you will not pay tax on the amount of your trade.

leim

thank you, Dan.

LDegrelle

Pretty much just like the question says. I'm in Pennsylvania.

Let's say $20,000 vehicle. $2000 rebate. $4000 down in cash. $1000 Tradein.

Do I pay tax on the $20,000. Is it only on $15,000? Or is it $13,000.

Thanks!

kyfdx

The only amount that may not be taxed.. is the trade-in.. I'm not sure of PA tax laws as they relate to trades..

But, the rebates and downpayment will certainly be taxed... In your example, at least $19,000 will be taxed....

regards,
kyfdx
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LDegrelle

Thanks for the heads up!

danf1

PA does not tax trade ins. money down is irrelevant.

rogersri

My son will be living in Amsterdam for the next year or so. I am about to combine a trip to see him with taking delivery of a BMW. Is there an effective strategy for buying the car in Europe, driving it some while there and then avoid some or all of the sales tax upon shipping it to Texas?

I am very flexible about who will ultimately own the car. My son can own it throughout, or he can buy it and give it me. In texas, a car can usually be licensed after a gift transfer with only payment of a $10 transfer tax.

maxillo

I am looking at similar issues involved in lease transfer from a NY leasee to myself. I live in NJ.

I don't know all the facts but....

NY state collects tax on leased vehicles at time of lease inception (ie upfront). The tax is not refundable even if the lease terminates prematurely.

Because the car is now registered in NJ, you owe them tax for the duration you use it (NJ defines a lease like a long rental. You pay tax on the depreciation of the vehicle during the time you are 'renting' it.)

I'm sure this has come up before. People frequently move between NY and NJ. There must be some sore of tax credit. Get in touch with the DMV and see what they say.....and make sure you post this message here so that other can learn from it.

cheers

jhoward77

I recently won a vehicle as a prize in a radio contest. I paid income tax on it as "other income" since the value was considered gambling winnings, which are income. Now GA is telling me I have to pay sales tax too, even though I did not purchase the vehicle. They tell me that since it has value, I have to pay sales tax. This just does not sound correct to me - does anyone know anything about this???
Thanks.

rroyce10

..... Did you flip the title into your name yet ......... ?

Terry.

jhoward77

Yes - the local dealership processed the paperwork for the title when I picked it up.

elschenko

I am buying a used car in Pa from a private owner, and live in NJ. I am wondering what the tax implications of this would be, ie do I pay the 6% at the DMV? Or if not how does this work?

breterst

How much tax should I pay on this lease, I live in NY (8.625%)
MSRP 52670
sale price 49425
res value 31602
MF .001
I come up with $1,788
dealer shows $1,957

janis3

I leased a car in MD., and live in NJ and was told that the tax is 6% on the monthly payment. Now, there is apparently a discrepancy between the dealership and Infiniti corporate. What is correct?

Kirstie_H

What's the discrepancy?? If you live in NJ, the tax rate should be the NJ tax rate. The rate is set by the NJ dept of revenue, not by a dealership or Infiniti corporate, so you might want to call your DoR.

raul33

I am planning to purchase a used vehicle from Albany, NY; however, I live in NJ...how does it work in regards with sales tax? I will register the vehicle in NJ, so do I pay 6% tax in NJ or do I have to pay the 8% tax for NY? both?

I have NJ registration that I plan to transfer from my old vehicle to the vehicle I'm purchasing (from NY)...how does that work?

Kirstie_H

I believe you'll do all of the title transfer & tax payments in NJ, just as if you had purchased the vehicle in NJ.
(Someone correct me if I'm mistaken!)

bender2

Didn't know where else to ask this. Is the Sales Tax calculated net of a trade-in or price before trade-in? Thanks.

audia8q

Most states calculate the sales tax on the cash difference...in the example below the taxable amount is $15,000.

selling price $20,000
trade in $5000
-------
cash diff. $15,000

bender2

Thanks for the response.

tisbe3

OK, I am a NJ resident planning to purchase a vehicle in PA. I see from other posts in this forum that I should pay NJ tax when I register the vehicle in NJ, but I don't need to pay PA sales tax. And that I should bring proof of NJ residence.

When I purchase the vehicle, what kind of plates will it need to have when I drive away? Will I need to get temporary PA plates, or temporary NJ plates? (But how could I have had NJ plates since I didn't bring the title to NJ DMV yet?) Will I need to pay *anything* to the state of PA for this transaction?

The seller indicated that the sale needs to occur in the presence of a notary public. Not sure why that is the case - perhaps to make the sale "official" for state records and sales tax purposes? But then if I'm a resident of NJ and paying sales tax in NJ not PA, is it really necessary to have the notary public? The notion of needing a notary public to buy a car in NJ is kind of strange to me. Apparently they don't have DMV offices in PA? Judging by the wait time at typical NJ DMV office that's probably a good thing!

Thanks very much for you help!

stickguy

looks like lots of questions from NJ here..

I also put this on another (lease) thread, so sorry for the double post, but I wasn't sure where to find the knowledge..

I am considering getting out of an almost new car (long story) for something different (a VW). Depending on the facts/figures, I may decide to lease the new one.

My preference is to trade in my current car (a Scion tC), for conveneience and also due to the sales tax credit on a trade (worth about $800 on a purchase).

I am in NJ, and my question is, will I get any use of the sales tax credit if I trade it in against a lease? I won't put any $$ down (so the dealer would have to cut me a check), but would I at least save having to pay tax on my monthly payment?

The payments would be less than the value of the trade, so I might not get all of it, but something is better than nothing.

Just want to have it straight before I end up discussing options with a dealer.

stickguy

asked a sales person today. he seemed pretty sure that you got no benefit trading in against a lease (other than the convenience of not having to sell your car privately).

Certainly swings the decision in the favor of purchasing if I decide that trading in makes sense.

xbombastic15x

I was wondering if there is a sales tax, when I register my car in MA, on a car that my parents gave me. It was $1500. But I can't find the info I need anywhere. So I was hoping someone could help me.

lama88

How is sales tax computed when leasing a car in NY State?
are they any web sites you can link me to so I can read about it. Thanks