Vehicle Sales Tax Questions

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  • livielivie Member Posts: 2
    What are the taxes and fees I should expect to pay buying a new car in charlottesville virginia?
  • bobstbobst Member Posts: 1,776
    We live in Fairfax County. When we buy a car, the sales tax is 3.1% and the tag/title fee is about $45. Those are the only fees we have to pay. It should be the same in your area as well.
  • isellhondasisellhondas Member Posts: 20,342
    Here in Washington, we pay 8.8% sales tax. On new and used cars however, it's a whopping 9.1%

    But we don't have a state income tax.
  • ginahoyginahoy Member Posts: 3
    Wife and I will be moving from NC to AZ soon and she wants a new car. Makes sense to get it there, right?

    Unfortunately, the car she wants (2006 CR-V LX 2WD) is nowhere to be found in Arizona or anywhere else in the southwest. Apparently, the only ones left are back east. Fortunately, the end-of-year deals I'm being offered more than cover shipping.

    I just need to make sure I don't end up paying Arizona sales tax (~8%) which is what I think would happen if I take possession in AZ. Ouch! Unfortunately, neither dealer is close enough to my current home for me to take possession personally.

    One of the dealers I'm talking with is in NC (3% sales tax with $1,000 cap) and the other is in Alabama (2% sales tax).. Normally, neither dealer charges tax if vehicle is shipped out-of-state. I don't think it matters who arranges the shipping.

    In that case, I imagine I'd HAVE to pay AZ.

    What if I asked the dealer in Alabama (or NC) to charge tax, and then I would apply for a title in NC? The cost is nominal, but I might have to pay the 1% tax rate differential to NC. In any case, once I get to Arizona, I bring my NC tag and drive the vehicle for a month or so, then apply for an AZ title. At that point, I'd simply be titling a used vehicle, which would only cost around $350 for VLT, which I have to pay in either case.

    Comments? Ideas?
    David
  • cccompsoncccompson Member Posts: 2,382
    Sales tax is owed and due to the state of which you are a resident at the time of the purchase. It has to be paid in order for the title to be issued by your residential state. The selling dealer is responsible for making sure that you get the title. So, yes, the selling dealer (wherever located) should collect the sales tax due your state of residence (here North Carolina) and forward the money with the MSO to whatever office in NC issues titles. If you buy the car from an Alabama dealer you don't owe the state of Alabama anything so there is no NC "differential" involved.

    (I'm leaving aside situations where the dealer in the selling state collects sales tax for the selling state on which the buying state will give full credit because the end result is the same).

    It sounds as though you've been in contact with AZ and know the scoop there.
  • ginahoyginahoy Member Posts: 3
    > It sounds as though you've been in contact
    > with AZ and know the scoop there.

    Actually, I'm basing my assumptions on what I gathered from talking to dealers yesterday.

    Regarding your comment about having to pay tax in my state of residence:

    I'm not certain of this, but if the taxes had been lower in AZ, I believe I would have the option of not paying tax in NC if I had the title first issued in AZ. But it's a moot point.

    I'm not sure if the AL dealer is set up to collect sales tax for NC. Dealers typically use an agent for that and the fees can be rather high. If I have a choice, I'd rather pay NC directly. But I believe you're correct that he can't charge AL tax; that is, unless I actually go to AL to pick up the car. In that case, I would need to verify that AL and NC have reciprocity. That's what I meant by the possibility of paying the 1% differential (I was considering going to AL to pick it up, but for several reasons, I realized it doesn't make sense to do that)

    My biggest concern is making sure my strategy of getting NC title will avoid AZ sales tax. I should be able to resolve that tomorrow when I call AZ DMV.

    David
  • cccompsoncccompson Member Posts: 2,382
    Yes, by all means call Arizona. My point about Alabama is simply this: it is the dealer's responsibility to deliver a title to you. Now, in fact, they probably would be more than happy to let you take care of the tax issue but in so doing you would be assuming the possibility of a screw-up (say the paperwork from the dealer is wrong) and you would have to fix it.

    I went through the same thing when I (a resident of Ohio)bought a car in Kentucky. The small town Kentucky dealer wasn't sure how to handle the transaction (having never dealt with Ohio before). Knowing that anything that can go wrong will, I had taken the local phone book with me. The dealer then called my local title office for instructions. Even after that, something (I'm not sure what) went wrong and the dealer had to send the paperwork to Ohio twice before I got the title. At least this way, they had to straighten it rather than me doing so.
  • ginahoyginahoy Member Posts: 3
    Ok. Arizona confirmed as long as vehicle is titled in another state first, and taxes have been paid, no additional tax is due.

    I appreciate the advice about not trying to title the vehicle myself. I've now found 3 or four dealers with the model I'm looking for and will ask for their out-the-door price with NC title. That way I can make a fair comparison. The dealer that pays a big fee to 3rd party company to handle this will be at a disadvantage.

    David
  • lemkolemko Member Posts: 15,261
    My girlfriend's father recently passed away. Her mother doesn't drive and was going to give the car - a 2003 Chevrolet Impala - to my girlfriend's brother. Does he have to pay any tax on the car when his mother transfers the title to him?

    Also - he is coming up to Philadelphia from Florida. Does he need a temporary registration in PA or can he simply drive the car back to Florida and register it there? I don't think the car is currently insured. I guess as long as he is insured in Florida, things will be OK. If he has no insurance, would he have to purchase insurance in Pennsylvania? I don't know how these things work as I never inherited a car nor sold or bought one from out of state.
  • qbrozenqbrozen Member Posts: 33,694
    well, it may vary state to state, but here in NJ, i'm almost positive he'd have to pay tax.

    As long as a title transfers hands, the state wants money. And you can't even write a low amount in the sale price field. Well ... you COULD, but they will send you a bill for the tax on what they feel is the fair market value of the vehicle.

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  • cccompsoncccompson Member Posts: 2,382
    Check with Florida on the tax question. In Ohio, vehicles can be gifted without payment of any sales tax. If the vehicle is worth more than $10,000 (probably not likely) there may be Federal tax consequences.

    He should be able to get a temporary tag in PA but may need to present proof of insurance to do so - call PA (their website may be helpful) to find out. His agent can provide the appropriate document if needed by PA.
  • darrin2darrin2 Member Posts: 1
    I heard that in IL when leasing a car, you have to pay the sales tax on the full car price, so leasing out of state has a clear advantage.

    Does anyone know if leasing a car out of state of IL but registering it in IL, will I still have to pay the sales tax on the full car price?
  • kyfdxkyfdx Moderator Posts: 263,223
    If you register the car in Illinois, you still pay Illinois sales taxes.. No way around that (legally).

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  • steve326asteve326a Member Posts: 58
    I just got my 97 Avalon in VA over the weekend. When I got back to MA to register it, MA RMV will not recognize an out of state dealer sale. If you purchase a vehicle from anywhere other than an MA licensed dealer, it is treated as a private sale and you will pay sales tax on the full trade in value of the car. Forget showing them print outs of edmunds, KBB etc. They go only by "their book". And they are totally arrogant to you to boot. If you protest in any way, shape or form, they can refuse to register your car. I paid 3100 for my car. They taxed me on 4025. Granted not much more, but I guess it's the principle of the thing.

    Thanks,
    Steve
  • bobstbobst Member Posts: 1,776
    I don't think you should have had to pay tax in Virginia. If you did, then you may be due a refund.
  • steve326asteve326a Member Posts: 58
    I'm sorry you misunderstood. This is what I had to pay when I got back to MA. I didn't pay tax in VA since I was not a resident nor registering it there. I transfered my MA insurance & MA plates on to it and drove it back. Got back last Sat night. Registered it Mon.

    Steve
  • bobstbobst Member Posts: 1,776
    I think the MA RMV people treated you fairly.
  • atlantarebatlantareb Member Posts: 7
    I live in GA and today I got a letter from the Revenue Dept. asking for the sales tax on a 2001 Chevy Express Cutaway Van which I bought last month for $15,000. I did not buy the truck from a dealership, but from an individual (or so I thought) at his residence. I looked at a copy of the old title and the owner was a corporation of the man I did business with. He was in refrigeration repair and his corporation is a one-man show.
    Must I pay this $1050 tax (7% of $15,000)?
    Are private-party vehicle exchanges being taxed in Georgia now? . . . or did I get billed because I technically bought the truck from a corporation?
    Thanks for any information.
  • steve326asteve326a Member Posts: 58
    Here in MA, you would be charged the sales tax on either the MA dealer price you paid or the book value which ever is higher especially if it was a private sale.
  • atlantarebatlantareb Member Posts: 7
    Well, if we have a law like that in Georgia, it's new. I've bought some used vehicles over the last 30 years in GA from private parties and I've never had to pay sales tax. In fact, I bought a Honda civic from a neigbor just a year ago with no sales tax.
    In other words, with a law like you have in MA, every time a car changes owners, the state gets another sales tax. Isn't a one-time sales tax on a new vehicle enough?. Such laws don't apply to any other personal property do they?
  • steve326asteve326a Member Posts: 58
    They call it a "use" tax. That's how they get it from out of state sales. And also, you pay 2.5% excise tax on your car "Every Year" here in MA
  • gasman1gasman1 Member Posts: 321
    I was stationed at Ft Devens, MA for several years. The joke at that time was to be living in Taxachusetts. However, I found out what real taxation was like when I moved to Virginia.

    Vehicle (and all property) taxation is quite different in several states. I've lived and purchased vehilces in MO, KS, IA, TX, KY, TN, VA, and MA. It's always best to check local regulations.
  • british_roverbritish_rover Member Posts: 8,502
    Yup I always thought it was funny how screwed up the tax system is in VA when compared to most other states.
  • atlantarebatlantareb Member Posts: 7
    Sometimes it's not so easy to check the regs. I've been on the GA gov website and I can't find a clear statement on sales taxes being applied to vehicles when private parties are involved. I do know that the Honda Civic I bought from a neighbor just last year did not incur any sales tax. "Why now, for my Chevrolet Express Van?", is my question. I'm kind of afraid to ask the government--they may go back and charge sales tax on my Honda purchase last year.
    I did find this curious statement about sales taxes on the GA gov site:
    "Is tangible personal property purchased over the Internet subject to sales and use tax? Yes. Tangible personal property purchased via the Internet and delivered to a Georgia address is subject to Georgia sales."
    How about that? But how many people pay tax on UPS deliveries? I don't, even if there is a law to that effect. And, likewise, I don't want to start paying tax on the private used cars I buy in GA after all these years of no sales tax on private transactions.
  • bobstbobst Member Posts: 1,776
    Our VA tax system seems Ok to me.

    We have a 5.5% income tax and a 5% sales tax. The tax on car sales is 3%.

    We also have a personal property tax on cars and boats, but I don't know how much it is. It has decreased a lot in the last few years.

    When we moved here from Maryland, it was very cheap to register our car.

    We get some benefit from our taxes. I have heard that we have 5 of the top 20 public colleges
  • gasman1gasman1 Member Posts: 321
    It's your decision. You can call and ask or you can not call and plead ignorance of the law. If you do call and get the answer that you don't want to hear...call another county or on another day... You may get the answer you want. I'm saying that tax laws are confusing for many that work with them and for most of us who don't.
  • gasman1gasman1 Member Posts: 321
    Glad that you are satisfied. I also liked Virginia and thought that I was getting my $$$ worth. However, I wouldn't choose to move there again due to traffic and total taxation (sales, vehicle registration, property, real estate, etc...).

    Don;t get me wrong... Virginia is a beautiful state (beaches to mountains) with plenty to do. However, I don't miss the NOVA I-95 commute.
  • gw406gw406 Member Posts: 1
    I live in Memphis,TN and my husband and I recently bought a 2004 Acura TSX from a private party who was leasing the vehicle from HONDA Corp. (we were unaware of this) We received a loan from a local bank who cut a check to HONDA in the lessee's name. The title came back to our bank with HONDA's name still on it. They gave it to us to get our car tagged/titled but the clerks office said the previous owner(lessee) never registered & payed taxes on it. So we can not get it registered until he pays it and he won't. Now our bank has added his taxes (over $2,000) to our loan and we still have to pay our share of taxes ourselves.

    WHO's RESPONSIBILITY IS IT TO PAY taxes on this vehicle the lessee, lessor (HONDA) or our bank???
  • audia8qaudia8q Member Posts: 3,138
    Well its kinda sticky and I am not familiar with TN. tax rules...but in my state the lessee can not sell a lease car to a private party without paying sales tax on the purcahse price/residual. Then the new buyer(you) must pay sales tax on the purcahse price or book value whatever is higher.

    Many folks try to sell their car for a profit and findout they have to pay sales tax and all of the sudden it isnt such a good idea.
  • cccompsoncccompson Member Posts: 2,382
    Sue all of them (hopefully, there is a small claims court in your jurisdiction where you can do this on the cheap) and let them fight about who owes the tax.
  • tidestertidester Member Posts: 10,059
    never registered & payed taxes on it

    Which means the previous owner was driving around with phony tags. Is that a criminal offense?

    tidester, host
  • gasman1gasman1 Member Posts: 321
    I don't have a 100% answer for you. However, my company leases about $12M in new trucks each year. Part of our lease arrangement is that we pay the sales tax and register the trucks locally. We "normally" purchase the trucks from the lease company at 5 years and we pay the sales tax based on the sale price. I've always thought this a bad deal for us, but have been told that we win due to significant tax advantages...

    Anyway, in my book, you should NOT be paying the original sales tax UNLESS that was clearly spelled out in the written buying agreement. Someone (bank or previous owner) must pony up those taxes or you could negate the deal.
  • audia8qaudia8q Member Posts: 3,138
    Anyway, in my book, you should NOT be paying the original sales tax UNLESS that was clearly spelled out in the written buying agreement. Someone (bank or previous owner) must pony up those taxes or you could negate the deal.

    I don't disagree with your comments...but it seems there was no agreement concerning the tax. The buyer was unaware the tax had not been paid on the residual purcahse price.

    A call to the motor vehicle or state tax department should clarify the tax rules for Tenn...but it seems this wasnt part of the original sale and the seller was either uninformed or slick.
  • jsm_expatjsm_expat Member Posts: 1
    I'm a US citizen moving up to Canada. I would like to purchase a vehicle in the US, but minimize the sale tax burden. Can I purchase in a low or no sales tax state like Montana (where I'm originally from)and then import directly into Canada?
  • twigatwiga Member Posts: 2
    I want to sell my car in Michigan. I got a trade in price from a dealer, which was way lower than I wanted to hear, but he also made a comment about some kind of tax that I would have to pay if I sell it myself. So do I have to pay tax when I sell my car??
  • steve326asteve326a Member Posts: 58
    No. The sales or use tax is payable by the purchaser not the seller. The proceeds of your car is not income. You already spent your taxed income buying it and already paid the sales tax when you registered it. The money you will get isn't even close to what you paid for it so there is no gain, if anything it's a loss. Just as you paid the tax when you registered it so will the new owner of it when he or she registers it.

    Steve :shades:
  • bulldugginsbullduggins Member Posts: 2
    I recently bought an 06 Civic hybrid in Virginia, but I live in Washington, DC. About a month later, my dealer mailed me a letter, saying that I owed them an additional $182.45 since the tax and title fees were higher in DC than they had quoted me.

    I went back and looked at my buyer's order (the fine print) and found what I think is conflicting information. One part says that the listed price is, essentially, the 'final' price that has been negotiated. Another says that the buyer is responsible for sales tax and title fees. Yet another says that any amounts listed on the buyer's order that don't clearly say 'estimate' are considered as final amounts.

    The negotiated (i.e., 'final') price included their quote for sales tax and title fees, I believe. No amounts listed on my buyer's order say 'estimate'. Still, I'm not sure if I am responsible for sales tax and title fees if they are higher than what the dealer quoted. I detailed this in a response letter to them, where I also asked for clarification, but haven't heard back.

    My question is simple: Am I obligated to pay them?

    Any ideas?

    Thanks for your help!
  • bobstbobst Member Posts: 1,776
    I live is Springfield, just outside the Beltway.

    After thinking about it, I don't think you owe them anything. If you negotiated a final Out-the-Door price that covered all fees and taxes, that should be enough.
  • atlantarebatlantareb Member Posts: 7
    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. :cry:
  • patrickapatricka Member Posts: 2
    I recently bought a car from an auto dealer who had bought the car at an auction, I paid the purchase price and he brought the title after two weeks and requested that I had to pay tax on the car since he had paid the tax at thye auction. Should I not be paying the tax when I register at the DMV?
  • patrickapatricka Member Posts: 2
    would you know if this also applies in NJ or NY?
  • kyfdxkyfdx Moderator Posts: 263,223
    Hmmmm.. sounds dicey..

    If you have the title, register the car first, and see what happens.. I don't know what state you are in, but in general, car dealers don't pay tax when they buy a car, because they are exempt.

    They may collect the tax at time of sale for the state, but that isn't what your dealer stated..

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  • mmoymmoy Member Posts: 1
    Hello,

    I currently live in Chicago, IL and am looking to move to Miami, FL and plan to make a new or used car purchase in the near future. I also may move back in a year or two to Chicago. Does anyone know what the tax rate is between the two and whether it is better to purchase in Illinois or Florida? If I purchase in Illinois and re-register the car in Florida, will I have to pay taxes again? Or if I buy in Florida and move back to Illinois, will I have to pay taxes again? Please help!

    Thank you!
  • new2allnew2all Member Posts: 3
    I have just been approved from my bank for my new auto loan. In this week I will be shopping for my new 2007 Lexus IS 250. I live in Mesa, Arizona

    Question on Tax, Title and Registration

    1) What is the sales tax for a new car from dealer in
    Mesa, AZ
    Phoenix, AZ
    Scottsdale, AZ

    2) Registration and Title fees. Are they percentage of the selling price or a fixed amount? I was told by the dealer this is DOC fee and should be around $500.

    4) When taking the delivery of the car, should I have my auto insurance for that particular vehicle?

    3) Any preffered Lexus dealers in Phoenix-Mesa area I should shop at.

    Much obliged for the above information
  • Kirstie_HKirstie_H Administrator Posts: 11,240
    1) See volvomax, "Vehicle Sales Tax Questions" #4, 16 Sep 2004 9:00 am
    It doesn't matter where you buy the car, only where you will register it. A quick Googling tells me that Mesa's rate is 8.05%

    2) See your state's MVD FAQ page, item #2: http://www.azdot.gov/mvd/faqs/scripts/faqs.asp?section=tr
    $500 is laughable considering it appears that the registration+title+air quality fees = $13.50. Do NOT pay anywhere near $500.

    4) (dunno why it comes before 3), but anyway...) No. You should contact your agent and let him/her know that you're buying a new car, if for no other reason than to get a rate quote. They can confirm, but I believe that you have 30 days to convert your policy to the new vehicle, so just bringing a current insurance card to the dealership is sufficient.

    3) What model? We can direct you to other Lexus shoppers/owners in these Forums for specific advice.

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  • british_roverbritish_rover Member Posts: 8,502
    Not sure how close Phoneix is to Scotsdale but one of my former co-workers now sells Lexus out of a Scotsdale dealership.

    They seem like good people there.
  • tmjddstmjdds Member Posts: 22
    (Illinois) I leased a 2004 745Li and because of multiple problems, the manufacturer is buying it back. I was going to lease a 530i to replace it but the dealer told me that I was not eligible for the tax credit from my 745. I believe that he is lying to me. I know that when you give back a car after a lease, you get the residual as a credit if you lease the the same brand and use the same leasing company. Anyone know where I can find the Illinois tax law that pertains to this? Does anyone think I'm incorrect?
  • mandajo111mandajo111 Member Posts: 1
    My husband is in the Army. He is currently overseas and purchased a new Ford Escape for me through the Overseas Military Sales Corporation. We are residents of Mississippi, but currently reside in Georgia for military purposes. I picked up the vehicle at a local dealer in Georgia, but they are not the official sales dealer. The one overseas is. Where will we have to pay sales tax to if applicable?
  • anonymouspostsanonymousposts Member Posts: 3,802
    If it's GA then you will have to go to a local Department of Revenue office and pay sales tax before they will allow you to title and register the car.
  • missedithmissedith Member Posts: 1
    We are about to purchase a new car. We live in the Tacoma, WA area. The dealer claims I have to pay taxes on the invoice and not on the the actual price they are offering me on the car BEFORE rebates. I know in WA you pay taxes before rebates. What should I actually pay taxes on?

    My husband is in the military and is a resident of Texas. Should we buy in Oregon which has no sales tax and then register the car in Texas? Would we have to pay sales tax to Texas even though we do not live in Texas because of the military?
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