nile13

Well, talking about a different kind of "Porsche tax". I finally registered my '95 C2 cab with 116K miles here in MA. At which point I promptly got whacked with $1500 in sales tax on the "book value" of the car, that happens to be $29,850. This is NADA loan value, btw. And even though they key in mileage, I don't think there's any adjustment for it.
Now, several things make me upset. I actually bought the car for $18K, and that's the honest truth. The great state of MA is not interested in the truth, nor in personal sales, they are only interested in their book or "MA certified dealer's bill of sale". Which makes any out of state dealer or any person-to-person sale pretty much SOL.
I was told to take it up with Department of Revenue. I doubt that they are willing to listen to anyone on this issue. I did print Edmund's valuation and the trade-in on the car is indeed $18K with that mileage in "rough" condition. I'll also get copies of online auction prices and Galves. But the question remains - has anyone successfully dealt with Department of Revenue here in MA and if so, how exactly did you handle it?
Thhanks!

DC from Cape Cod

They typically take the dealer price as the value. However, if you buy from an individual than they will accept it only if it seems reasonable. $18K is a steal and the law permits them to charge tax on the fair market value even if you paid less than fair market value.

You know you paid far less than fair market value and so does MA.

They see people with forged bills of sale all day long...unless you have a legitimate bill of sale from a dealer you probably are going to lose an appeal.

nile13

My contention is that fair market value is what I paid or very near, based on condition and mileage of the car.
I still think that this is the case, based on what I see in auction results, for example.

DC from Cape Cod

The Registry will accept a dealer bill of sale (even from out of state) to substantiate value. They are not interested in wholesale or trade in values...only verifiable retail sales prices as tax is computed on retail sales, not on wholesale or trade-in values.

They use Nada Loan value across the state to verify value if they doubt your proof. They are only required to be consistent, not accurate. The burden of proof is on you to prove otherwise.

I am not sure how you are going to prove that a 1995 Cab is only worth $18K...even with your mileage, unless you can produce a dealer bill of sale. Is it worth a few (or many) hours of your time to save $400 or $500 dollars? This might be a case of balancing time versus reward (and chance of winning).

You got a hell of a deal on that car...

DC from Cape Cod

P.S. - If the car was in an accident than that is a different story altogether.

Davies

What the heck kind of condition is your car in that you think its fair market value is $18,000?? If it's really rough, with super high miles on it, I could see it getting that wholesale...but wholesale doesn't count when paying the tax man. Most people don't get to pay wholesale. They use blue book retail value because EVERYBODY submits phony bills of sale when it comes to pay taxes (except of course...for us honest guys).. It's like our insurance policy premiums. We pay for the sins of others.

That car was a steal at $18,000 under any circumstances, so I personally wouldn't sweat a few hundred bucks at this point.

993Maineiac

Ah yep-Maine taxes on book value only. I asked if they wanted to buy mine for their book value, but the woman declined. They did, however, reduce it when I said I didn't have a roof rack!

Al

nile13

No, they will not. Ask me how I know :-(
It has to be a dealer "certified in MA". Some dealers in NH and RI are, of course the dealers in VA or CA where I bought most of my last 6 cars are not.

Thanks, DC! That's the only reason I bought the car - it was cheap enough (and I was itching for adventure). But I had to come up with $18K price justification to convince the seller. And I did use the same arguments with him (he actually had a $17K buy offer from a local dealer in CA). I have no problem proving to anyone that the car is worth exactly that amount, based on Edmunds, kbb and other things. Hey, it needs a new top, which is a $4500 affair from a dealer or a minimum $1500 from non-dealer. The big question - will DOR even listen?
$500 is not a trivial amount of money to me at this point (unemployment sucks, btw). It buys a chip from Steve, to put it in real-world terms :-)

Road Runner

Same thing happened to me in CT on a Tahoe I bought for a winter/tow vehicle. I had to pay the tax on the BV to register the truck. Then I found out that there was a form (in duplicate of course) to submit to the Dept of Revenue Services and request a rebate of the excess tax, if the proper supporting documentation was attached. The form had to be signed by the seller as well. I had to attach a copy of the check used to pay for the vehicle and an explanation of the reason for the sale price at less then BV. A hassle, but It worked, as I did get my refund. Maybe MASS has a similiar form. (I got the form from DMV) Good Luck.

nile13

Road Runner, MA has the same forms and I will submit them, no question. I was just curious if someone in MA did that already and if there are any pointers.
I do have a copy of the original certified check to the seller, so that should probably help some.

DC from Cape Cod

Keep in mind that MA is looking for proof that the market value is $18K. They are allowed to charge tax based on current MV even if you paid less than MV. The more info you can include to substantiate your MV of $18K the better.

nile13

Thanks, DC. I think that the only proof of market value I can give them at this point is recent sales, online guides and conditions/needed repairs.
It's going to be interesting, if nothing else.
BTW, that's a very important question. Is sales tax really charged on "market value" and not sale price? This is not property tax afterall. That one is strictly by the book.

DC from Cape Cod

They are used to people screwing them. As your purchase price differs (by a HUGE margin) from their book value, they are assuming that you are trying to avoid paying tax.

You will also be charged property tax (excise tax) on your car...and that is based on the book value as well. The good news is that it drops down to $25 over something like 7 years (or so).

I think your best bet will be to emphasize the condition aspect as I don't think you will find much support in the online price guides.

Shmurzik

Mike,

Here is what you get for buying the car from another region (and the one with depressed p-car prices). Besides, IMO the fair price would be higher. I mean, I know - the price of a car is what somebody is willing to pay for it, but given time the price would probably be higher. Hence the higher average price – hence the value in their reference books. Once again, you're a lucky bastard

ljugete

The same thing happened to me in IL! It's not unique to MA.