sales tax on used cars - how does your state work?
07-16-2003, 11:14 AM
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sales tax on used cars - how does your state work?
I'm looking to do an informal poll here. In GA, if I buy a pre-owned car from an individual I pay no sales tax to register the car. If I buy from a dealer (regardless of whether they are in the state of GA) I get a letter in the mail asking for a copy of the bill of sale and a check for 7% sales tax.
What does your state do as far as sales tax? I would love to find a resident of a state that has no sales tax on used cars that would be willing to run a title through their state for a small "broker's fee".
Thoughts?
As for those of you that will accuse me of fraud, I'm only looking to keep the state of GA from double dipping. After all, the sales tax has already been paid once somewhere.
What does your state do as far as sales tax? I would love to find a resident of a state that has no sales tax on used cars that would be willing to run a title through their state for a small "broker's fee".
Thoughts?
As for those of you that will accuse me of fraud, I'm only looking to keep the state of GA from double dipping. After all, the sales tax has already been paid once somewhere.
07-16-2003, 11:22 AM
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In PA, a dealer must charge sales tax. When an individual sells a car, the buyer pays the tax when they register the car.
When I bought my 951 from a dealer, I saved some on the sales tax by paying for part of it in cash. The car was $8000, so I gave him $3000 in cash and then wrote a check for the other $5000. That way I only had to pay tax on the $5000. (sales tax is 6% in PA, by the way.)
When I bought my 951 from a dealer, I saved some on the sales tax by paying for part of it in cash. The car was $8000, so I gave him $3000 in cash and then wrote a check for the other $5000. That way I only had to pay tax on the $5000. (sales tax is 6% in PA, by the way.)
07-16-2003, 11:25 AM
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IF I recall correctly... In Texas, when you trade in a car you pay tax on the difference only. If you buy from an individual, you pay tax when you register the car for the full amount of the sale. However, you do not pay city taxes or metro taxes - only the state sales tax.
07-16-2003, 11:28 AM
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Uh, no. If it is a licensed dealer, they should include the sales tax, etc under the heading (TTT) which is short for tax, tag & title. The 7% sales tax, based on whatever county you live in, not where the deal is to take place. The tag fee, usually just a transfer fee, sometimes it will be the whole ad valorem for 1 year. The Title processing fee, which I think is $12 for the state of GA. (Contact the Tax Commissioner for your county to verify.) I would just call anonymously for information.
07-16-2003, 11:29 AM
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Originally posted by slinky
In PA, a dealer must charge sales tax. When an individual sells a car, the buyer pays the tax when they register the car.
In PA, a dealer must charge sales tax. When an individual sells a car, the buyer pays the tax when they register the car.
Usually when buying a car from a private party the seller & buyer will agree to tell the license bureau a much lower sale price for the car so the buyer can pay a lot less tax.
Not that I would do that.
State sales tax just jumped up 1% here. It's 7.5%. Ouch.
07-16-2003, 11:31 AM
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clarification
Sorry,
To clarify, if I buy from an out of state dealer I get a letter from GA dept of revenue asking for the copy and the check for 7%. A GA dealer will collect the tax at the time of sale.
To clarify, if I buy from an out of state dealer I get a letter from GA dept of revenue asking for the copy and the check for 7%. A GA dealer will collect the tax at the time of sale.
07-16-2003, 11:32 AM
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In CA, you pay a tax to register a car purchased from a private party. Its a percentage of your stated purchase price. Since many of these transactions are done in cash, its common for people to claim they paid less than they did for a car to dodge the tax.
There are some used car valuations that factor in DMV reported sale prices that get artificially lowered by this practise.
There are some used car valuations that factor in DMV reported sale prices that get artificially lowered by this practise.
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07-16-2003, 11:35 AM
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In my opinion the best way to save money on sales tax for a used vehicle is to agree with the seller to put a much much lower price on the bill of sale (for example, say you pay $8,000, then only put $2,000 or so on the bill of sale). Me and the PO of my car were thinking about doing this, but I opted not to incase I wanted to sell the car down the road, as I did not want any future buyers to think the car was worth less than I wanted to sell it for.
07-16-2003, 11:40 AM
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In NY when i bought my used cars from private parties they charge you sales tax at the DMV when you register it. If you agree with the seller to lie to the DMV you can save some $
07-16-2003, 07:04 PM
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In NJ and NY as far as I know, you pay sales tax when you register/title the car.
If you do tell them you paid a lower price for the car they may question you on it if it's way below value.
If you do tell them you paid a lower price for the car they may question you on it if it's way below value.
07-16-2003, 09:02 PM
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In AZ, if it's a private party sale, there's no tax. 8% or so from a dealer. Then the registration fee, which is based on what the state says it's worth new, reduced for age. My 2003 Acura RSX-S is $300+ a year. My 87 951 is $50/year.
Twelve years ago, in SC (where they taxed all used car sales) I drove my sister to do the paperwork for and pick up a private party used car. He agreed to sell it for $2000 but say it was $500 to reduce the taxes. They signed and notorized the paperwork at the $500 price, before exchanging any money. As she wrote out the check, I innocently pointed out that she could write $500 and take the car. He gave me the dirtiest look I've ever gotten! (She paid the full $2000).
Twelve years ago, in SC (where they taxed all used car sales) I drove my sister to do the paperwork for and pick up a private party used car. He agreed to sell it for $2000 but say it was $500 to reduce the taxes. They signed and notorized the paperwork at the $500 price, before exchanging any money. As she wrote out the check, I innocently pointed out that she could write $500 and take the car. He gave me the dirtiest look I've ever gotten!
(She paid the full $2000).
07-16-2003, 09:14 PM
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Originally posted by badass951
In my opinion the best way to save money on sales tax for a used vehicle is to agree with the seller to put a much much lower price on the bill of sale (for example, say you pay $8,000, then only put $2,000 or so on the bill of sale). Me and the PO of my car were thinking about doing this, but I opted not to incase I wanted to sell the car down the road, as I did not want any future buyers to think the car was worth less than I wanted to sell it for.
In my opinion the best way to save money on sales tax for a used vehicle is to agree with the seller to put a much much lower price on the bill of sale (for example, say you pay $8,000, then only put $2,000 or so on the bill of sale). Me and the PO of my car were thinking about doing this, but I opted not to incase I wanted to sell the car down the road, as I did not want any future buyers to think the car was worth less than I wanted to sell it for.
07-17-2003, 04:36 AM
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In SC ...
Dealer usually figures sales tax in with the final price (5%, I think).
If you buy from an individual you pay when you register the car (again 5%, but there is some cap like you do not pay more than $300). When I purchased my MG (back in the day), the previous owner wrote the sales price in at like $200. I really gave her $1200 ... worked out great for sales tax!
Dealer usually figures sales tax in with the final price (5%, I think).
If you buy from an individual you pay when you register the car (again 5%, but there is some cap like you do not pay more than $300). When I purchased my MG (back in the day), the previous owner wrote the sales price in at like $200. I really gave her $1200 ... worked out great for sales tax!
