Anyway to avoid paying tax on a car purchase?
 

Someone told me that in Ohio you don't have to pay tax on a used car when you purchase it out of state? I'm trying to purchase a used 98 Grand Prix GT coupe as a daily driver until the Porsche is fixed but was curious if I can avoid taxes if I purchase it in Ohio?

You should have to pay taxes when it is registered. But all that gets confusing when you are dealing with state lines and all. I'm sure Ohio is assuming you are paying taxes to the state in which you are purchasing it.

All you an do is call the DMV and ask. Just don't give up too much info. As in "I bought a car in _______ what do I do?"

Move to a real state.

NH has hardly any taxes, and registration fees are peanuts too

In NY you can lie about the purchase price when you register the car to save tax ( if it was purchased from a private party )

If Sid's suggestion is a bit to much work to save a few bucks, there are other things that might help.
Some states don't tax private party sales.
If you buy out of state, the state you live in can't tax the sale (only the state of purchase). The state you live in can only get you with property tax/registration.
If you can't get the car in a tax free state, ask the seller to lie about the price. Most will.

I'm from OH, ughhum, we don't , lol, but you can note a lower price of purchase and thus pay lower taxes. I think it's like 6-7% sales tax on used cars here. I didn't think MI had a higher tax or luxury tax on cars? My uncle livess up there along with my G-ma.

Ag has it wrong, and I know something about this as a CPA. You need to register the car to get title and you are going to get smacked at that point. While States differ, usually the only way to get off is a transfer between family members. Otherwise, you can lie about the price and try to get the State to buy that but this is such a common scheme every motor vehicle department in the USA knows about this and will do some checking.

The statutes are "Sales AND Use" taxes. True, you may not have to pay the original State sales tax, but once you bring the product (car) into your State you are subject to the "Use" tax which is the same as sales tax. So all the tax free mail orders you have been making to Paragon and Land's End, you really owe your State Use Tax. The States don't have the resources to catch all these Use taxable purchases, but they sure do on cars and boats since you need to transfer title and get a license for the item.

Summary: you can carve down value a bit, but if you want title you have to fork over.

No, I have it right. I know, because I didn't pay any sales tax on my car. Nobody at MVD even asked about the purchase price, since it was a private sale. Both states where I've purchased a car have sales tax only. In SC all sales are taxed (private sellers usually lie about the price). In AZ used car sales between private parties are not taxed.
If your state has an extra, non-sales tax, then bummer, but no state has the authority to tax an activity in another state (unless they have an agreement to do so, as explained below).

As to the mail order purchases, only states that have a legal agreement to share their taxation (I think NY and CT do) can tax an out of state business, and only from another state in the agreement. However if the company has any business presence in the purchaser's state, that state can tax a mail order purchase (since they can argue both parties are in state). States have tried to force out of state mail order outfits to pay taxes, but the federal courts deny it, since it would be regulation of interstate commerce, a power clearly given to Congress.

The important thing to know (and the reason why IceShark's car purchase experience differs from mine) is that the states are not uniform on car purchases or taxes.
He probably knows MN and US taxes well, but I doubt he knows as much about the other 49 states. And I know I don't know anything about OH's taxes.
The best thing to do is call your DMV and ask (that's what I did...ADOT's level one call center is a women's prison, don't give out personal info, in case yours is too). And call the DMV of any state you might make a purchase in. They'll know the laws that apply to your situation.

Get the seller to write on the bill of sale " Sold to XXXXXXXXXX for $0.01."

...in CT, sales between private parties are taxed according to a book (name unknown) the DMV uses, regardless of what's on the bill of sale. Sales tax collected by licensed dealers is always OK, regardless of how far off the numbers are from the book.........at least, I've never seen a dealer questioned about the amount.
Don't ask me how I know this.

Doug

..and another thing!
 

...where does any state get off collecting sales tax every time a vehicle is sold? As far as I'm concerned, the sales tax should be paid once when the car is new and that's it.

Doug

Ag, well I know many of the States and what I wrote is the general rule, maybe some have exceptions I didn't come across. For example MN doesn't tax items like groceries, but IL does.

You missed the key point. There is a difference between sales and use tax. Sellers that have no nexus are not REQUIRED to collect and remit sales taxes for sales out of state. That has been decided by the Supremes. Then the use tax kicks in and that falls to the buyer. No one ever does it though, unless the transaction is caught by the State, like in title change.

Many people in Chicago, where I lived for many years, were buying furnitue mail order out of North Carolina. It was really wide spread. The Illinois tax guys heard about this and went down to NC and got the sales records. Then proceeded to send out use tax bills. They did the same with US Customs for Illinois international passengers clearing that were coming into OHare with high value purchases made out of the USA. Emeralds, the stone, were a big item as they are worth more than a diamond.

We live in a great country.

If you like the services you receive in your country and want those services to continue, pay your taxes.

Otherwise......can you say "Budget Cuts"

Support your Country!

Some companies will actually make you pay the mail order sales tax even if they don't have to. Columbia House and BMG do.

I've never heard it called a Use tax. That's pathetic.
But that just adds to dmsog's point. Politicians will tax wherever they can, because most are evil bastards, corrupted by their power, who love spending other people's money.

You mean you didn't buy that car for $100 not running needing lots of work like all our 944s? Tax in this case would be 8.25.